You may also want to consider 85% financing with single premium seller paid mortggage insurance to reduce your down payment exposure. Depending on your credit score, this may be a good option to consider.
Find yourself a nerd and work through these cost benefit analysis. I'm happy to help if needed.
First I think you should make sure you have 60% loan to value. You know how much our values have changed here. Second, how much interest do you hae on the first yousaid high 5's, is that just ove5.5 or is it 5.875%. right now we have 4.875%. Depending on how much you owe on your home, that in itself could be very helpful with the payment on the second home. If you only owe $150K on the first home it won't be too significant. But if you owe 550K and refi your savings a month will be great. You may have enough to offset
the second home enough to be comfortable. If you need to know just how much your home is worth give one of us a call we can help you out with that. Then you can make an informed decision.
Best of luck to you,
Prudential Ca Realty Brea
You will need a minimum of 20% down on the purchase of your rental property, and that interest rate will be higher than your primary residence rate, so the question comes down to, can you kill two birds with one stone by securing "cheaper" money through your refinance and will the cash-out portion be enough for your down payment?
Is the property you are purchasing a single family residence, a condo, multi-unit property?
Hope this helps,
Roswell Moore, CMPS
Certified Mortgage Planner