Posted on: 18th Apr, 2009 02:38 pm
My delimma is that I currently have a great interest rate at 4.8%, not upside down or late and not a flipper. Current LTV is approx 85%. I will have owned the home 5 yrs in Jan 2010 when loan converts. Rate will be 2.75 + 1 yr Treasury which could make the rate even lower than it is now. It can adjust up to 2 pts/year with life cap of 9.875%. Current lender will not refi. Should I try to refi with another lender, wait a year or more to refi or not refi at all. My advisor thinks it's very possible that rates could go beyond 9% and suggested refi. I did live in the home for 2 of 5 yrs. Even though I don't live there now could I qualify for owner occupied or 2nd home, since I am renting now? If I qualify for "2nd home" would my rate be lower than non-owner occupied loan? I appreciate your advise. FICO is 760.
hi kelmcats,
welcome to our forums.
i must say you've managed to keep your credit score at a good level. :)
you may qualify for a refinance mortgage on your rental property. but are you planning to convert it into an owner-occupied second home? usually, one gets lower rates on mortgages meant for 2nd homes (which are owner-occupied) in comparison to non-owner occupied properties.
under the old rules, one could convert a rental property into a primary home and qualify for capital gains tax exemption on its sale. but he needed to have stayed in it for 2 years out of the previous 5 years of the sale. however, since january 1, 2009, everyday you don't live in a home adds to the percentage of capital gains tax you'll need to pay. moreover, capital gains are not waived on your primary residence unless it has been your primary home.
since january 1, 2009, the percentage of time a home is not your primary residence will be used to determine how much of capital gains won't be waived. say, if you own a home for 12 years, but have lived in it only for 6 years, then you'll need to pay tax on 1/2 of the capital gains after sale.
good luck
welcome to our forums.
i must say you've managed to keep your credit score at a good level. :)
you may qualify for a refinance mortgage on your rental property. but are you planning to convert it into an owner-occupied second home? usually, one gets lower rates on mortgages meant for 2nd homes (which are owner-occupied) in comparison to non-owner occupied properties.
under the old rules, one could convert a rental property into a primary home and qualify for capital gains tax exemption on its sale. but he needed to have stayed in it for 2 years out of the previous 5 years of the sale. however, since january 1, 2009, everyday you don't live in a home adds to the percentage of capital gains tax you'll need to pay. moreover, capital gains are not waived on your primary residence unless it has been your primary home.
since january 1, 2009, the percentage of time a home is not your primary residence will be used to determine how much of capital gains won't be waived. say, if you own a home for 12 years, but have lived in it only for 6 years, then you'll need to pay tax on 1/2 of the capital gains after sale.
good luck