Question by Legallyblonde: I want to buy a new home and keep my old one. Should I refinance old home for better interest rate?
I am considering purchasing a new home in a few months, but would like to keep my existing home. I now qualify for a much lower interest rate on my existing mortgage and would like to know if refinancing my existing mortgage will hurt or hamper my qualifying for a mortgage loan when I purchase my new home.
Answer by Steve D
Well, refinancing at a lower rate will help if you stretch out the payments – the lower rate and longer time frame will lower the payments. However, you still have to qualify for the next mortgage based on income and debt ratio. It will come down to how much of your income is taken up by the existing mortgage and how much would be taken up by the new mortgage. Obviously, there is nowhere near enough information in your question to even begin to answer.
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