I recently bought a home that was already paid off and I am using it as a rental. I was wondering if it was possible to take out an home equity loan or line of credit or refinance on the property to purchase other properties even though I, personally, did not take a loan out on the property? If it is possible, how long is it that I have to wait to until I am able to explore either of these options?
Thank you in advance
So you have equity in the house? If so, you can pull out equity. I used a HELOC on my primary residence, but have not tried to get one on a rental yet, as I don't have much equity in them so far.
Isn't it where one buys a home that is already paid off that there equity already in the home. If not, how does one accumulate equity in a home?
if you have no mortgage and own it, your equity is the value of the property. I have done a cash out refinance on a rental before. I believe it was up to 75 or 80 percent of the value. I would check with some local banks. Seems like it was easier before I had four mortgages and maybe not an option after four.
How long did you have the rental before you were able or chose to explore the cash out refinance option?
I had owned it several years. That is a good question though as there are some seasoning rules on some loans. Good question for a bank or mortgage broker.
What you are looking for is a home equity line of credit. It probably won't be too much with only one rent house. You can probably find one if you don't get discouraged when they say no because most of them will say no. A smaller more local type of bank is the most likely to say yes.
Thank you everyone for all the feedback!
First of all you have the more important: an equity asset with no mortgage or loan.
This, for the banks, are great, cause it means that will be easyer (less time and research) to get a HELOC.
I recommend you to find a local mortgage broker, instead directly the bank. This broker will work with you filtering the documents and searching the options in the market ( in a lot of banks, small or large).
Good luck !