Want to purchase another house

[Anonymous]

We have a house that is worth about 550,000 with a balance of 90,000.We would like to get a cash out refinance to purchase another house out of state that we would use as a vacation home now however move to in 3-5 years.The houses we are looking at are about 350,000 to 400,000.Our fico scores are between 715 to 760. and should go up a little more in a month or two when all credit cards are paid off.My question is is this possible to do maybe do a 5yr.arm buy the house now and pay off the arm when we sell  our first house in 3-5 years.I love this forum so many questions being answered.Thanks in advanced.

[ShanetheMortgageMan]

Hi kanga, welcome to the forums.  Yes, you can purchase the new home with an ARM or a fixed rate, it is your choice, and if you plan on paying off the new mortgage within the fixed rate period, and it appears you have the equity to do so, then an ARM would very likely be the better route to go considering the rate is quite a bit lower.  Alternatively you could take cash out to 85% on your primary residence, paying off the $90k loan would leave $377,500 remaining that you could use to purchase the new home with cash instead of a financing contingency - perhaps allowing you to negotiate a better deal.

[Anonymous]

Shane Thank You