Primary Home Refinance To Rental

[Cole Leonida]

Hey everyone,

My wife and I have a primary residence that we are looking to cash out refi. We have been in the home for about 16 months and we are planning for me to take a new job and move to another state. We would like to cash out refi to a much lower rate and take some cash for our next home purchase. Any issues I should be aware of before refinancing and renting? As of today, I have not accepted a new job so I don’t have any actual plans of moving, that is just the hope. Any advice you avoid any tax or legal issues would be great!

Thank you!

Cole

[Justin Phillips]

@Cole Leonida @Jody Sperling I couldn't have said it better myself.
I'm a huge proponent of a 1st position Line of Credit tied to a zero balance sweep checking account. That way you have access to equity, but you don't have to lock yourself into 30 years of payments for that equity on day 1. Along with that, when it's tied to a ZBA, all of your normal banking deposits/idle funds are automatically swept directly towards your remaining balance. Parked on your line, those funds work much much harder than they would in any high-yield savings account, tax free. 

My wife and I put it on our former primary (current renal), and it's been an awesome tool for us. We've continued to enjoy our cashflow and appreciation, and as soon as the market turns we'll stroke a check out of our line for our next property. 
I actually liked the loan so much that I left my job in Medical Sales to join a broker who specializes in them! For the right person, it's an incredible financial tool.