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https://klimadao.medium.com/what-is-klima-dao-initial-discord-offering-5735c996c2ac
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No way don’t ever give up that 3%. Hold out until you have the 3.5% for FHA. And make sure you your next property is profitable even with the current rates.
Totally agree!!
Coach
Going from 3% to 6% will cost you hundreds of thousands of dollars over the years, and that’s before you consider the closing costs (do a total cost calculator for exact numbers)
How much is the 3.5% for FHA?
Another option is to start your real estate business with the state bc you will be running a business (follow all their policies and procedures)
Apply for a 0% APR business credit card (12-18months of no interest)
Find a way to make the down payment on the second property using that credit card (google ways to get cash off a business credit card)
Just an option. I am not recommending this approach. You have to take the approach that is best for you
I’ve never joined Tik Tok, funny enough. Business is business
This is why 3%+ down payment conventional loans are the best solution for first time home buyers with good/great credit. Bc then you can use FHA on the second without needing to refinance out of the first
Look into a HELOC - home equity line of credit. This is another loan which utilizes your equity in your first home to make money available to withdraw. You keep the remainder of your balance at the 3% and this second loan allows you to pull at different times which could be nice for repairs for either home. If they offer you $80,000 but you only need $40,000 on your down payment the other $40,000 will be available to withdraw for years. Also to get a new loan not only is it at a much higher rate, but the interest on a mortgage is up front. You will have to pay more fee that you won’t get back like settlement fees but you also restart your loan term paying back into that upfront interest. Good luck!
According to my back-of-the-napkin calculation, you’d be losing 30% of your investment this your mortgage was priced as a bond, if you take the 6%.
Heloc not cash out refinance.
This is not how to be successful in real estate investing. I would not touch the 3% because we are probably not going to see rates that low for a very long time. Generally, I would not recommend pulling money out of one property to invest in another. Ultimately, you want these properties to get paid off over time (or atleast build a good amount of equity). This applies to heloc as well. Consider a heloc as a short term loan that you can pay back quickly. Why pay interest on a downpayment when you can just save cash. If you can't save 3.5% for a downpayment, then it might take longer and you are not yet ready. Trust me, social media has convinced people that you don't need money to invest in real estate. Nobody talks about risk. Keep it simple. Work, save downpayment, buy and repeat.
I have acquired 3 rental properties using this approach.