Profile picture for bvt14

Refinancing existing home for down payment on new home.

We have a lot of equity in our existing home. I'm wondering if we can refinance our home and use the cash out for a down payment on a new home. With the interest rates low, our existing home payments would remain the same and can be covered by renting it out. If we move to the new home and it is the primary residence and the existing home becomes rental property how does this affect the mortgage on the existing property. I hope I made myself clear. Would the amount we qualify for on the new mortgage be affected by the existing mortgage? I guess I'm trying to figure out the best way to handle converting our existing home to a rental and purchasing a new home. We have excellent credit, good income and no debt (other than the one mortgage). Thank you in advance.
  • February 27 2009 - North Dorchester
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Answers (5)

Profile picture for Clearpoint

Yes you can, though some would tell you to check your original note to make sure there is no clause preventing it but in reality no lender is going to call that note due since you originated it in good faith as your primary residence and have done so for nearly 7 years.

  • February 27 2009
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Profile picture for bvt14
Let me ask another question. We have had our current mortgage since 2002; it is for our primary and only home. We now want to move and purchase a new home. Can we keep the existing mortgage, even though we may rent  the home and live somewhere else?
  • February 27 2009
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Profile picture for Clearpoint
Here is the deal, if you do not intend to occupy the home you are refinancing than you can not consider it a primary residence.  You will sign a notice of occupancy claiming you will occupy the property and if you know you are just converting it into a rental that is considered mortgage fraud and the lender can call the note due.


  • February 27 2009
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Profile picture for bvt14
If our existing mortgage was for a primary residence then we move and purchase a second home and finance it as a primary residence, will we be required to refinance the first mortgage if that property becomes second/investment home.
  • February 27 2009
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yes you can. 

  • February 27 2009
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