I want to purchase my 2nd property using funds from a cash out refi. I'm not sure if this is a good idea. I have 70g in equity and the home I want to purchase is only 15g. The problem that I am needing help with is...if I have a 3.25% interest currently and the bank is offering me a 4.5% cash out refi that will take care all of my cc balances and give me enough to purchase new property, is this a smart move to go from a 3.25 to 4.5%? Monthly I will save $400 (paying off cc) plus from the new property I will profit $400 (rental). Any thoughts?
I would not refinance to a higher interest rate if it were me. Can you do a home equity line of credit (HELOC) instead?
Yes I can, the bank did offer that option but the rates for the HELOC were higher than the cash out refi. I'm not too familiar with either. I have been researching online the pros and cons of each.
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