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Using Equity in Your Home to Buy a Rental Property? Cash-Out Refinance is the Way to Go

You’ve built up equity in your home, so you have a powerful tool that can do more than just give you security – it can give you investment opportunities. One of the best ways to use that equity is through a cash-out refinance, especially if you’re looking to buy a rental property. In this post I’ll show you why this is the way to go to grow your wealth and achieve financial freedom.

What is a Cash-Out Refinance?

A cash-out refinance is a refinance of your current home loan where you replace your existing loan with a new, larger one. The difference between your current loan balance and the new loan amount is given to you in cash. You can use that cash for anything but using it to buy a rental property is the smart way to multiply your investment.

What to Do

1. Check Your Equity First: Determine how much equity you have in your home. Most lenders require you to have at least 20% equity after the cash-out refinance. If you’ve owned your home for several years and property values have increased, you may have more equity than you think.
2. Talk to a Mortgage Pro: Working with an experienced mortgage broker can help you figure out how much you can borrow, what interest rates are available and what your new monthly payments will be. I can guide you through the process and make sure your new loan aligns with your overall financial goals.
3. Find Your Rental Property: With the cash from your cash-out refinance, you’re ready to start looking for a rental property. Look for properties in areas with high rental demand, good appreciation potential and good local regulations.

Bottom Line

A cash-out refinance is a powerful way to use the equity in your home to buy a rental property. It’s a way to diversify your portfolio, build long term wealth and passive income – all while keeping your primary residence safe. Ready to do this? Contact me and I’ll guide you through the process.