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Should I do a cash-out refinance?

I owe $60,000 on my home, with a $25,000 equity line that I'd like to roll into the refinance.  I'd also like to take some cash out ($80,000) for a possible second home purchase in northern California.  My credit score is about 839, and my only other debt is a car payment of $507 per month.  Does this sound like a good idea?
  • November 14 2012 - Palo Alto
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Answers (5)

Yes. You are probably going to get better terms on the loan by combining the HELOC. I almost always advise taking cashout of your primary to purchase an investment property since the money you are taking out is tax free and your financing will be much more favorable because you are borrowing against your primary home. Good luck!
  • October 13 2014
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Talk to your banker who has the HELOC.  They will give you more professional options. I am inclined to consolidate debt.

  • December 24 2012
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Thank you so much.  I'm still looking for a house so I haven't made a move oon that yet. 
  • November 30 2012
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From a rate perspective---It sounds like a great idea. Assuming you have the equity in your home....Rates are amazing and you should get a better rate on your owner occ property.

ivan
  • November 27 2012
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You will get a better rate on your owner occupied house than you would on an investment property so for that reason it would make sense.  You should shop around for rates on both refinancing your current loans into one and take the cashout and also what the rate would be for an investment property purchase.  I hope this helps.

Thanks,

Jonathan Mosca
  • November 14 2012
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