4

I'm considering refinancing my current mortgage, which would probably lower my payments by ~$100/month. However, I'm also planning on buying a second house in the next few months, which means I'll be taking another mortgage.

Does it make sense to refinance now, or it would lower my chances for a good rate on the second house?

I've refinanced a year ago already, lowering my payments by ~$150 then, and the rates since continued to go down...

  • Just curious.. What rate were you at and what rate are you considering? – Alex B Oct 25 '11 at 17:19
  • @Alex - 4.75 vs 4.275. Including the closing costs, I'll break even within a year if I refinance. Last refinance was for free, I didn't pay any closing costs. – littleadv Oct 25 '11 at 17:45
3

The extra $100/mo will certainly add to your borrowing ability, debt to income ratio. Your question seems to be regarding the slight ding to your FICO score for a hard pull. And my question back to you is whether your score is that borderline. When you say "in a few months" why not wait a bit and talk to the bank at the same time for both. They might even cut you a deal for not having to review your applications separately. And it will only be one credit score pull.

  • I think I'll go with that. – littleadv Oct 25 '11 at 20:36
  • @littleadv: Did it go like what JoeTaxpayer recommended (mortgage with the same institution and you refi + new title in one go)? – f1StudentInUS Jan 30 '12 at 6:26
0

Another way to look at this is that the current house payment is a certainty; the new house payment may or may not happen and it's not a done deal until the papers are signed and the deal is closed.

For that reason alone (that you don't know if and when the additional mortgage is going to happen) I would refi the main residence now - the sooner the savings kick in the better.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.