Refinancing for another home

[Reginald Hendricks]

Good day I am Alex Hendricks and I have question concerning refinancing. I currently have a house that has equity and would like to refinance to use that equity to purchase another home. Will this give me two different mortgages payment or will have one payment mortgage?

[Dave Thomson]

Hi Alex, welcome to BP! It depends if you obtain a HELOC or a cash out refinance. A HELOC would technically be a 2nd mortgage, however it's like a credit card with a low interest rate and no closing cost, and you can pull out as much or as little cash as you need. Whereas a cash out refinance you would have to pay closing cost, would get a set amount of cash, but ultimately you'd end up with one mortgage payment.

Using a HELOC for the BRRRR strategy is a great option. But, there are many factors that come into play...the amount of equity in your current house, your current loan rates, the deal on your 2nd house, etc.

I’d recommend you call a local lender/bank and talk to them, then you can talk to other lenders/banks in the area and find the best rates.