Newbie financing questions

2 Replies

I just refinanced my first house and ended up with about 60k in equity. I’m looking to purchase a second single family home and I’m not quite sure what my next step is. Can I borrow against the equity in my house? I also have a 401k that I can borrow from. Any advice is much appreciated

@Luke Kleck I would like to help you out but I would need more information. You say that you have $60k in equity. Do you mean that you have an unused HELOC for $60k? Or do you mean that you have an appraisal for $200k and your mortgage is $140k? If it is the second one, you likely can't use that.

Do you live in the first house? Are you buying the second house as an investment?

@Luke Kleck while $60k in equity sounds great the more important question is the PERCENTAGE of equity.  So if $60k represents 10%...then it is not likely that you will be able to find a loan to take cash out.  But if that represents 50% equity...then yes!

However, you mentioned that you just refinanced. Why didn't you just take cash out then? Was there something going on at the time that prevented you from doing it? If you do take a new loan for cash out...you'll have to pay all those closing costs again. So maybe a HELOC might be better? Anyway, if you can answer some of the questions above that would help us with the correct response. Thanks!

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