Hi Guys,

There are several ways to use the equity in your home to raise cash for real
estate investing. Here are the basics:

1. Refinance Your House- You can refinance your home in order to get an improved interest rate, but you can also get a cash-out refinance mortgage, and use the cash to purchase an investment property, or you should have least enough for a down payment. Your current lender may have rules about cash-out refinancing, so check with your mortgage advisor before you begin the process. Keep in mind, a cash-out refinance mortgage can have higher interest rates than other mortgages.

2. Take Out a Home Equity Loan- A home equity loan is a loan using the equity in your home as collateral, and is separate from your mortgage. The amount is of the loan is based on a percentage of the equity in your home, you may be able to borrow 90% or more of your homes value; less if you are taking out a home equity loan on a second property that you do not occupy. The advantages of a home equity loan the option to pay the loan back early without penalty, and you may choose to pay off those high interest credit cards.

3. Open a Home Equity Line of Credit- A home equity line of credit has a credit limit just like a credit card. Like a home equity loan, the amount of the limit is based on your credit worthiness and the equity in your home. You can transfer funds from your home equity line of credit, or even write checks directly from the account. Interest rates are generally lower than cash out refinance mortgages, and there are tax advantages as well. Another advantage is you are only paying interest and making payments on the amount you owe, not the entire amount of the loan. You may also be able to renegotiate in the future for a higher credit line when the equity in your home increase s, especially if you have made above-minimum payments on timely basis, or home improvements.


Regards
Bryant

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Property Rental

Good info, you may want to introduce yourself to the other members in the Introductions section.

Welcome to the forum.

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Welcome to REW - be sure to introduce yourself, your background, etc. in the topic at the top of the page.

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Jennifer Karlen & Jon Karlen
Kentucky Horse Farms - Louisville Kentucky Real Estate - Lexington Kentucky Real Estate
Serving the Louisville KY metropolitan area including Jefferson County - Prospect Shelby County - Shelbyville Oldham County - Goshen, La Grange and the Lexington KY metropolitan area including Fayette County - Lexington Woodford County - Versailles Scott County - Georgetown Jessamine County - Nicholasville

Good info - thanks for posting and welcome to the forum.

Unusual first post, but great to have you! Introduce yourself when you get a chance, and thanks for the info.

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Jim Olenbush, ABR, CRS, GRI
Broker / Realtor

Austin Real Estate | Lake Austin Real Estate | Lake Travis Real Estate

a well thought post! although i think its a risky strategy which would only work if you've built good equity in your home e.g. 5-10yrs.

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Bad Credit history not such a problem with mortgages:
mortgages for people with bad credit, bad credit mortgage and IVA mortgage

I agree with avonreal I am always a little worried about people that jump in with 0 down. I know some people started out that way and were successful. But my advice would be 4) Save up some money by cutting out other expenses.

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Ki Gray - Austin Realtor - Working in Austin his site covers the Austin Real Estate market. If you are considering investing in Austin be sure to check out his Austin Real Estate Blog or look through some of the Austin Homes currently for sale.