Should I Refi Rental To Payoff Personal Residence?
Are there any issues with refinancing a rental property to payoff my personal residence?
I know the finances but any tax, legal or other things to be aware of???
Are there any issues with refinancing a rental property to payoff my personal residence?
I know the finances but any tax, legal or other things to be aware of???
First of all, I don't even understand why you are doing this. Why are you paying off the mortgage on your primary res?
Actually, it depends on your wishes! I personally ask individuals which they would rather have $100K in Cash or $100K equity in their home. Most answer cash, but their actions are ingrained to go with the equity.
Personally, I'd refinance the Rental for sure (7+ Yr Interest Only) and keep the cash for investing.
Read "Rich Dad, Poor Dad" and then do which ever you feel is best for you.
Ray
I have to pay a A loan nevetheless.
On my rental property, I have interest only loans and would so here as well.
Would be nice to have the house paid off, since should anything go I'll gladly sell of a rental and not the home.
Beside I have another rental which I'll be selling or refinancing to have $$ for further purchases.
One concern is how taxes would be treated since I'm using business (rental props) to pay off a personal loan. For example, can I write off interest legally??
Without doing additional research, I would say you may not be able to deduct the interest on the part of the refi used to pay off your residence.
First, if you borrow on a property that is not your principle residence, the amount of the loan not going towards the purchase or improvement of the rental is personal interest, not a rental expense.
Second, in order to deduct interest on your principle residence, the loan must be secured by your principle residence, which would not be the case here.