Should I Refinance and pull money out to buy second home?

007Cowboy

LoanSafe Member
My current home is valued at $715,000. I owe $147,000. It's a beautiful home, but it is not my forever home. I want a smaller home and something more like a cabin... I'm 50 years old. My current rate is 4.25 on a fixed 15 year loan.

Can I (or should I) refinance my home and take out $350,000 - $400,000 out and by my retirement home as a cash buyer?

I'm thinking I can get lower interest rates and buy now. Or if nothing else, get the cash out and be ready to buy when I want..

I appreciate your thoughts.

Drew
 

Jzone

LoanSafe Member
My current home is valued at $715,000. I owe $147,000. It's a beautiful home, but it is not my forever home. I want a smaller home and something more like a cabin... I'm 50 years old. My current rate is 4.25 on a fixed 15 year loan.

Can I (or should I) refinance my home and take out $350,000 - $400,000 out and by my retirement home as a cash buyer?

I'm thinking I can get lower interest rates and buy now. Or if nothing else, get the cash out and be ready to buy when I want..

I appreciate your thoughts.

Drew
Do you want/need two homes? How close are you to retirement? How far away would this second home be? Pesonally, I would wait until I was within a year of retiring before I purchased a second home. And remember, finding a place to retire to takes a lot of thought. Unless you are moving to an area, you have lived in before , it could be quite an adjustment.
I know a couple who moved from Michigan to Florida because of the warmer weather, but hated it. They had only spent two weeks a year in Florida and thought it would be great to retire there. They finally settled in Virginia, but it took them 3 years to sell thier Florida house. Not all retirement moves work out like that but be sure that this cottage is located where you want to be for the rest of your life.
 

Survivor_IN

LoanSafe Member
If you can afford the (higher/combined) payments then all you have to do is sell when the market is right. Cash purchase does have its advantages and you can keep your eye open for the right deal. However, you're losing money in that the cash is not necessarily earning interest and you are paying interest. I might consider it for a lower rate and they say if you can get 2% lower to do it (refinance). Plus, it might be nearly same payment if you do 30 yr loan.
 
Top