AskBP

#AskBP 078: Should I Get a Home Equity Loan or a Cash-Out Refinance to Buy a New Property?

Expertise: Landlording & Rental Properties, Personal Development, Real Estate News & Commentary, Real Estate Investing Basics, Business Management, Flipping Houses, Mortgages & Creative Financing, Real Estate Deal Analysis & Advice, Real Estate Wholesaling, Personal Finance, Real Estate Marketing, AskBP
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Should I Get a Home Equity Loan or a Cash-Out Refinance to Buy a New Property?

On this episode of the #AskBP Podcast, Brandon shares his advice for a listener who isn’t sure what the best loan product to pursue for his new property. Discover the major reason Brandon would choose one of those options over the other!

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Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He began buying rental properties and flipping houses at age 21, discovering he didn’t need to work 40 years at a corporate job to have “the good life.” Today, with nearly 100 rental units and dozens of rehabs under his belt, he continues to invest in real estate while also showing others the power, and impact, of financial freedom. His writings have been featured on Forbes.com, Entrepreneur.com, FoxNews.com, Money Magazine, and numerous other publications across the web and in print media. He is the author of The Book on Investing in Real Estate with No (and Low) Money Down, The Book on Rental Property Investing, and co-author of The Book on Managing Rental Properties, which he wrote alongside his wife, Heather, and How to Invest in Real Estate, which he wrote alongside Joshua Dorkin. A life-long adventurer, Brandon (along with Heather and daughter Rosie) splits his time between his home in Washington State and various destinations around the globe.

    Andrew Syrios Residential Real Estate Investor from Kansas City, Missouri
    Replied about 4 years ago
    If you can get the cash out, you gotta go with the cash out (IMO at least)
    Richard
    Replied about 4 years ago
    But what do you refinance IF the home is paid for? Home Equaty loan or line of credit sound like viable options or just apply for another mortgage
    Wilson Churchill from Madison Heights, Michigan
    Replied about 4 years ago
    Assuming the equity loan has low or no closing costs, I would say the decision depends on the loan amount. It isn’t worth paying over a thousand in closing costs if the loan amount is only 10 or 20 thousand.
    Terrence Arth Investor from Scottsdale, Arizona
    Replied about 4 years ago
    Good point Wilson, the amount desired is a key variable since closing costs as a percentage could be considerable if the loan amount was small.
    Sanjeev Jha Real Estate Agent from Needham, Massachusetts
    Replied about 4 years ago
    I don’t agree. I will do Home equity line. You get a better rate, no closing cost and use cash out as much you need.
    Leann W. Attorney from New Bern, NC
    Replied about 4 years ago
    Ok… I’m busting you for having the whole set of Twilight books on your shelf! Pleeeeeze…. pleeeze take down ASAP!
    Tek Chai from Podunk, Washington
    Replied over 3 years ago
    Thanks Brandon of your #AskBP on this question. Are there any sites that discuss the pros and cons of the different strategies in regards to tax efficiencies, cost effective strategies  1. Cash Out Refinance,  2. Home Equity Loan and  3. Home Equity Line Of Credit (HELOC)