I've been reading about how to use equity from investment properties as DP for new properties but what about the equity in your current home? Due to low rates, we are refinancing our primary loan for our home and have approx $150-200K in equity in 3 years. Do we cash out some of it while refinancing right now? I haven't seen much about the +/- about using equity in your own home to fund down payments. Thoughts? We plan on keeping primary home as our primary or future rental, so long term investment. Thanks!!
A lot of people get started this way. Only real negative for me is depending on your current rate you might just make your primary house payment bigger, and extend your payoff. If you can cover the increase and aren't worried about extending the payoff hardly any downsides.
Another option is a HELOC, but with these low rates if you can pull off a cash out refi that is the route I would personally go.
@Daniella Lamis My wife and I got a specialized Heloc on our primary, and I loved the program so much that I left my job in Medical sales to join a company that specializes in them!
It allows us to quickly pay down our principle balance, which saves interest cost, while retaining access to up to 80% of our equity. As soon as a good opportunity comes up, we'll simply write a check out of our line and purchase it in cash. The nice thing, each new property pays off quicker than the last with the additional cash flow. I'd definitely recommend you educating yourself on the program, and seeing if it might be a good fit for you all. There are brokers that offer it in every state.
@Chris Davidson thank you!! the refi rates for a cash out aren't ideal IMO so thinking of a HELOC instead.
@Justin Phillips We are in Gilbert so I might be reaching out to you regarding Life Changer!!
@Daniella Lamis Oh, that's so funny. We actually live in Gilbert as well, and Life Changer is based in Queen Creek. I'd be happy to get you all the details and see if it may be a good option for you. Reach out anytime.
@Daniella Lamis look into the all in one loan. I am doing the same thing as you except with the AIO loan it is a first position HELOC. You can use 80-90% of the equity in your primary residence as an ongoing Heloc. It is tied into your checking account so you pay down principal first. Videos on YouTube from CMG financial are pretty informative.