Hello members with knowledge of financing in real estate. I own a condo for which i have a HELOC. I want to do a cash out deal on the condo because its worth 800K and i paid cash for it. Yesterday i found an amazing property for which i need 100K down payment and i was thinking of using my HELOC money. By having a none zero balance do i hinder my chances to get approved for cash out on my condo? Some mortgage brokers gave me mixed and unclear answers that "its probably not a good idea". To me it does not make any scence, why cash out can not be the same as refinance where some of the money goes to balance and some of the money goes to cover any previous loan which is in my case would be the HELOC.
Keep your equity in your condo around 40% minimum and you should have no problem with a cash out refi. If you subtract the $100K in the HELOC you could conservatively borrow another $380K assuming the rent from the condo will cover the mortgage along with the other operating expenses. This assumes the condo is a rental and you don't live in it. Do you live in it? Either way it comes down to cash flow. Not being a good idea is not the same as not possible.
I actually do live in the condo. does it change your answer? thank you for responding so fast
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