Should I refinance first or buy a house first?

Renting it out more than 6 months per year is called investment (not a 2nd home) so you will pay a higher rate if you refi it. Also most lenders have stopped cash out loans on investment property- so you might be able to get a lower rate (depending on how you financed it when you purchased it.. if you financed as 2nd home your rate now is probably better than it would be having to switch to investment) but probably not get cash out. Personally I would purchase first since you want the highest score possible for the best rates. By refinancing the investment property your score will drop because of the high balance to high credit ratio on the credit report. In other words if you refinance investment property at $150,000.00 & the loan amount is $150,000.00 on the C.B. it looks like you are 100% maxed out on that loan, which drops your score quite a bit. Also, you said you have a house that you use as a 2nd home, does that mean you already have a primary residence also & this new purchase will be a third home for you? If that's the case there could be other issues as well because some programs won't allow 2 loans outstanding.. If you have other questions you can email me if you like. Hope all of this makes sense!

if the 2nd home was originally financed when it was your current (primary) residence, i wouldn't touch it. your interest rate will be alot higher if you try to refy a seconed residence. just concentrate on the main home for now.