How To Use Your Current Home to Buy a Second Home

It’s called a cash our refinance and it could help you afford to turn your current home into an rental, or purchase a new income property. Here is how it works. Let’s say that you have owned your current property for several years. Chances are the market has pushed your home value higher and even though you can’t do anything with it, that added value belongs to you and this is where the cash out refinance comes into play. Right now millions of people are refinancing their homes because of historically low interest rates just to have a lower monthly payment. You can also refinance your home and pull out it’s increased value in return for the bank taking a larger ownership share in your home. Let’s say that you bought your home for $300,000 and now you believe it is worth $400,000. That is $100,000 in equity that is just sitting there. You could complete a cash out refinance and end up with a lower interest rate.

Many others may also be doing a cash out refinance as well, but they might only use that money to buy new cars or pay down other debt. Instead you could take that money and use it to secure an income property that you manage as a landlord and that results in the equivalent of a paycheck every month. With real estate values remaining strong investing in real estate represents some potential stability in your portfolio while stocks and other more traditional investment infrastructure like stocks seeing increased volatility. Contact us today to find out how to reinvest your homes equity and to receive in depth coaching on becoming a landlord. We would be happy to help you out.