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My primary home has an interest rate (15 years) 3.125% and 100k mortgage loan left. I have just bought a second home for investment with the rate 4.625% for 30 years.

Should I refinance my primary home and take cash out with 450k (100k pay off the previous mortgage loan and 350k pay off the second home)?

With this way, I can save my 30 years interest on investment property (each year 4.6%) and consolidate my debt to my primary home 450k. My primary value is about 600k. Should I go with this way, since I can use the rental payment to double pay my primary ?

Is there any better way to make the profit out it on tax? Thanks

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    please mention the country.
    – mhoran_psprep
    Apr 19, 2017 at 0:05
  • be very careful to do your research and check the fine print, something like this could actually end up costing you a TON more in the long run if you are not careful. consult a real-estate attorney, a neutral loan manager (meaning they have nothing to gain/lose from your decision), or experienced agent to evaluate all your options and crunch the actual numbers before you pull the trigger. you don't want to lose what you have worked hard to build on a bad decision. that being said, if done right, yes it can be a benefit to you and save you some money.
    – GµårÐïåñ
    Apr 19, 2017 at 0:05
  • At the risk of stating the obvious and might be why it was not mentioned but also consider the lending terms. If the home you are refinancing the 15 year loan is for another 15 years assuming you are getting the same interest rate (but it's probably changed) then you are comparing apples to apples. However if you are comparing the 15yr interest rate and going to refi for another 30yr then you will have roughly the same 4.6% interest all things being equal. The reason is that banks charge higher interest rates the longer the time horizon due to the risk of inflation and interest rate changes.
    – Part_Time_Nerd
    Apr 20, 2017 at 13:49

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Should I refinance my primary home and take cash out with 450k (100k pay off the previous mortgage loan and 350k pay off the second home)?

Assuming that one is able to refinance this at 3.125%. This may not be the case, the refinance rates may well be higher. You would need to look around to find out what kind of rates would be offered and the one time cost of refinance.

Other aspect that needs consideration is if you fall behind on payments to due whatever reasons, the lender can / will come after primary home and possibly foreclose. Depending on your rental property, you may not be able to evict the tenant in time so sell and pay of the lender or the tenant could have damaged the property reducing the value.

Keep the mortgage on secondary home is more risk averse strategy, if you fall behind on payments, the worse is the rental property is lost ...

Is there any better way to make the profit out it on tax?

This would depend on the country and the tax benefits.

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