My Fiancé and I are new to this group and have been wanting to get into rentals and flipping and everything overwhelming.
We have “owned” our house for 5 years. My grandparents lent us money to purchase a fixer upper which we have fixed. We have our grown this house. We need advice on paying them back the remainder we owe. We owe $24k.
My question here is...should we take the equity out of the house, pay back the grandparents to get out from under them and then rent our house out? Should we refinance? Should we look at rates for both options? We would love to keep this house as our first rental. Any and all feedback is so appreciated!
@Kolee Spink , First off, welcome.
I think you should call a few lenders and consider both options. If you went the refi route, would the goal be to get some cash out to also be able to pay your grandparents off?
You'll want to have an idea how much equity you have in your home and a realistic appraisal value because that will determine how much you may have access to. You'll then need to see what LTV you are finding for HELOCs and alternatively if you went the refi route, what LTV they would lend up to in order to take cash out. Another question to consider: If you took out some or all of the equity, and rented the home out, would the rents minus all expenses cover either the new refinanced mortgage payment or else the mortgage plus HELOC payment?