OfflineIm in the Army and am overwhelmed of where to start:
Im stationed in Louisiana but have a house in Maryland. My house facts are:
1. Owe on house: 130,000, house value $155,000-165,000 (online resources such as zillow say about $152,000 but other houses in neighborhood are selling for $170,000)
I have renters in there now paying $1100. I want to make about 300 a month. My current mortgage is locked in at 6 b/c Im in Army (Servicemembers Civil Relief Act) but is an ARM.
My question is: Should I refinance and take out a HELOC for downpayment on investment properties here in Louisiana:
1. Can I refi with a VA loan? I understand then that I wouldnt have any to little out of pocket expenses-is this true? Can I refi and do a HELOC at same time-figured this may help out.
2. Should I do a 5/1 ARM to get a lower rate and make more money or should I get a conventional fixed loan with a higher interest rate and buy down a point or so (want to be at about 4.5%)
My credit is score is 764 so pretty good I think.
3. Where do I go to get a loan? Should I go to a broker or look for best rate online and then call directly? If broker, can anyone recommend one?
Sorry for all the questions but I am a bit overwhelmed!
Very Respectfully,
Gary
I think your best bet is a VA Streamline Loan (no out of pocket closing costs). They've been creeping up in interest rate, but it is still a good rate and a Veteran's benefit and you should use it. Also, in many states there is a Veteran's tax exemption ($2-$4k) on the value of the home that you may qualify for, so look into that if you haven't already.
ARMs are fine if you are disciplined and have a plan, but most people aren't and life happens that can disrupt your plan to bail out before the ARM adjusts, so be cautious about that direction and use it as a last resort. From what you've told us, I don't you need to go that route at all.
Dean teaches several different "No Money Down" strategies to buy investment property, and it looks like you're really in pretty good shape. Learn these and you should do just fine.
Without a vision the people parish. Prov 29:18
Thank you for help. I think I failed to mention that my loan is not a VA loan as I got it before going into Army-the Servicemembers Civil Relief Act reduces mortgages to 6% if you got mortgage before entering the service.
First let me just say thank you for your service to our country! My son-in-law was deployed to Iraq last month leaving his wife and newborn son (pictured on left). It's very hard on her, I appreciate all service men and what they have to endure, so again thank you. If you do get the heloc, don't put all your money into one deal, leverage it out with several. The BEST way to learn is to not use ANY of your money OR credit. Get out of your ARM as quickly as possible. Hope this helps!
God bless you,
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."