Noobie Question on Refinancing
7 Replies
Timothy Casallas
Investor from Queens, NY
posted over 3 years ago
This is going to be a real n00b question but I am new and I always get confused about refinancing.
The down and dirty is I bought a house for 135k with a VA loan so 0% down payment. 2 years later the house is appraised at 155k. Could I essentially just refi and pull 20k out and it wouldn't affect my loan? Or use that 20k to help pay off my current loan?
Brie Schmidt
(Moderator) -
Real Estate Broker from Chicago, IL
replied over 3 years ago
Originally posted by @Timothy Casallas :
This is going to be a real n00b question but I am new and I always get confused about refinancing.
The down and dirty is I bought a house for 135k with a VA loan so 0% down payment. 2 years later the house is appraised at 155k. Could I essentially just refi and pull 20k out and it wouldn't affect my loan? Or use that 20k to help pay off my current loan?
The $20k equity can only be pulled out by doing a cash out refi which would be a new loan. You can also do a HELOC and pull cash out, up to 90% of the value
Timothy Casallas
Investor from Queens, NY
replied over 3 years ago
Thank you @Brie Schmidt for the very quick response. I am about to do some HELOC research here in a minute but while I have you here, would a HELOC be a new loan as well or require me paying the bank back anything even though it is my money? Basically are there any cons to a HELOC?
Brie Schmidt
(Moderator) -
Real Estate Broker from Chicago, IL
replied over 3 years ago
Originally posted by @Timothy Casallas :
Thank you @Brie Schmidt for the very quick response. I am about to do some HELOC research here in a minute but while I have you here, would a HELOC be a new loan as well or require me paying the bank back anything even though it is my money? Basically are there any cons to a HELOC?
It is your money when you sell.
A HELOC is a second lien on top of your current loan, so it would be a second loan payment.
Brie Schmidt
(Moderator) -
Real Estate Broker from Chicago, IL
replied over 3 years ago
90% LTV is $139,500 so you would be able to pull cash on that minus your current loan balance
Timothy Casallas
Investor from Queens, NY
replied over 3 years ago
@Brie Schmidt Thank you again for the info. I schooled myself up as well on HELOCS. did some google searching. I guess what I really want to know is that other than selling the property, how would I be able to pull out the 20k made off of appreciation without having a new loan on it?
Brie Schmidt
(Moderator) -
Real Estate Broker from Chicago, IL
replied over 3 years ago
Originally posted by @Timothy Casallas :
@Brie Schmidt Thank you again for the info. I schooled myself up as well on HELOCS. did some google searching. I guess what I really want to know is that other than selling the property, how would I be able to pull out the 20k made off of appreciation without having a new loan on it?
You can't. The only 100% LTV loan is a VA loan
Timothy Casallas
Investor from Queens, NY
replied over 3 years ago
@Brie Schmidt Gotcha! Really appreciate the help :)
Free eBook from BiggerPockets!

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you