| Own 3 properties, Refinance one of them? |
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overwhelmingdebt99
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 12 Jun 2013
Location: Orange County, CA
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| Own 3 properties, Refinance one of them? |
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Hey everyone, I appreciate any input that you can provide.
Own 3 properties, 1 house (worth 800k), 4 unit apartment 1 (worth 760k), 4 unit apartment 2 (worth 760k).
Mortgages:
House - 116k at 5.375%. Maturity 11/17
4 unit 1 - 209k at 6.25%. Maturity 1/18
4 unit 2 - 534k at 6.625%. Maturity in 23 years
Credit line - owe 248k at 3% variable
I was thinking of refinancing just the 4 unit 2 because it is at a high % and I owe a lot. Unfortunately my credit rating is bad (600's). Should I do it?
Thank you!
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Wed Jun 12, 2013 3:49 am |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
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I would refi the home - get about a $600,000 30 yr <4% Fixed Rate loan. (the jumbo limit in Orange is $730k so not an issue). The payment would be $2900/m.
Use the $484,000 cash to pay off the Unit #1 $209,000, that gets that payment stopped (and offsets most of the extra $2000/m that you'll be paying on the house). So your cash-flow will be about the same.
Use the remaining $275,000 to pay-off the $248,000 VAR loan. That gets rid of your consumer credit, helps your credit situation, and avoids the risk of a VAR loan.
As for your 6.625% note, keep it for now. Even in good times and with good credit, about the best you can do is drop the rate by one point (one point is about $350/m) - helpful but not a game changer for you. But it might be worth a try in a year or two after yuour score builds and things settle out.
And it depends on other things that you have - new cars, car loans, CC laons, etc.
The risk-premium difference between OwnerOccupied loan rates and NonOO rates is about 1.5% - ie, about 4% for a home & 5.5% for a NonOO (my lowest on is 5.75% & I have good credit). So IMO you won't be able to do much better on your two NonOO properties. Most of your available equity is in your $800k home, that is where I would go to raise capital.
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Wed Jun 12, 2013 4:05 pm |
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