Should I Get a Home Equity Loan or a Cash-Out Refinance to Buy a New Property? [
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- Опубліковано 26 сер 2024
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On this episode of the #AskBP Podcast, Brandon shares his advice for a listener who isn't sure what the best loan product to pursue for his new property. Discover the major reason Brandon would choose one of those options over the other! - Навчання та стиль
![Should I Pay Cash or Leverage My Real Estate Investments? [#AskBP 027]](http://i.ytimg.com/vi/QlEySyfHKns/mqdefault.jpg)
These videos are much better than the podcast because the podcast is a bunch of joking around for the first half of the show.
My attention only lasts about 6 minutes so it's better for me.
Stop he so damn uptight dude. Relax.
So first he explains what a home equity loan is, and then what a home equity line of credit is, and how those two differ... But I'm still wondering what a cash out refinance is and how that is different from a home equity loan.
Shalinar1212 refinance is buying the home again based on the new value and you get the equity but youre buying your house again is why some never pay off their house
@Derek Dials noo
My question is if your home is paid off why would you take out another loan to buy another house out right then take out another loan of your 2nd house then repeat the same process over and over and over isn't that loan stacking?
@Derek Dials Here's the issue with *all* of your process: It's slow. The process you're referring to will take you several years to be able to get into your next property. The kinds of strategies that BP goes for is getting into your next investment property within a number of weeks or months, not years. Your process has very poor scalability
@Derek Dials You can make super little and still be continually investing, that's the purpose of things like BRRRR. Your method is fine for a first property, but the fact of the matter is that there's practically no scalability to what you're doing and it will never be a real stream of income at that rate
HELOC or line of credit is also 100% tax deductible in Canada. Whereas a mortgage the interest is only tax deductible.
Wow! I did not know that. Great insight. Thanks for this comment
False , only the interest is deductible in a heloc.
woah! good to know.
I doubt that.
My question is:: with equity loan from the first home (paid off) can I buy me another house to live in? Which now will be my primary and the house that was paid off (now w/equity loan) rent it instead ?
Thank you for getting to the point much faster in this video. It was a bit confusing though: You talk really fast and seemed to use terms interchangeably; it was difficult to keep up with the qualities of cash-out refi vs a home equity loan - which I thought were different types of loans. I understood the HELOC portion.
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can I cash-out refinance a house more than once? Ex. first time take out 100K in equity, after the house raises another 100K in equity then take out another 100K in equity a second time on the same house.
Yup
1:57 is when he actually gets to the point 👉
I feel that I can tell the age of the video by the length of the beard in the thumbnail
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If your home is pay off, why don’t u just buy another investment property without doing any equity loan. Why put your pay off home back into a loan n pay interest? My thought
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So when you do this are you just stacking 2 loans on top of the properties?
i am more confused now than when i started. so if you own a property outright you get a new first mortgage but we dont call it a first mortgage we call it cash out refi. and if you owe 80k on a house worth 400K and you refi we we don't call it a cash out refi call it a home equity loan? but that's different then a heloc because its not credit its amortized cause its a loan? i think we need a white board for this.
Exactly
Why can’t or why didn’t they just get another traditional mortgage on the rental property it doesn’t seem wise to put your primary residence at risk for a quick buck
Its not a quick buck and its pretty safe investing when you talk about real estate. No investor has ever lost money after 10 years in a property. You only lose money if you sell before 5 years on a property.
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Hey Brandon. I own my own house and months away from paying off my home equity line of credit. What's the interest rate for a cash refinance on my own house? Is it fixed or variable? I want to house hack my own house AND do a cash refinance on this house to buy a second house!
Your rich
are HELOC and HEL the same? As I understand it, no... I'm just running with it as it is, though...
I didn’t understand why he said to choose refinance instead of first mortgage. He said that the interest on refinance would be a bit higher then the normal mortgage... or did I misunderstand. If someone can let me know thanks.
Love the show
he didn't say to choose the refinance instead of the first mortgage. he said, to choose the cash-out refinance, which replaces your first mortgage.
Hi guys, how this will work on 2022? Any good advise?
Just completed a cash out to position ourselves to pick up a few properties if this crash happens
For example, if I have a 100k home, take out a loan for 90k (10k in down payment) and wait 1 year to do refinance, and then in that year I rehab the house into a 200k house, will the refinance essentially give me a check for 100K?
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No
good advice in my opinion
I've always been curious--if someone has a home that's been paid off completely--Why isn't that enough? Why jump back into the pit again?Maybe i'm just the simple type---But once I buy a home and it's completely paid off....That's it. I'm set...I'M DONE.
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What if your house isn't paid off, but you have 180k of equity in it. Still a good idea to pull a loan on that equity?
That depends on what the refinance will be used for and your goals (by refinancing it will reset the life of the loan so be mindful). In most cases if the numbers make sense, then yes, it is absolutely okay!
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Most banks I'm finding have a minimum limit for Cash out refi of 50k.
I own a home worth 45k ARV . They are offering a HELOC 80% appraised value. Original plan was to pull out the HELOC to put into another house until season period of a year was over and convert over to cash out refi..but bc the minimum amount is 50k, I wouldn't qualify for cashout and would be stuck in the HELOC. Do you have any suggestion as to what to do?! This is my first deal and I don't want to screw it up. Here are the numbers.
Purchase price 13,500
Rehab 7,000
ARV 45k
Rent 800
Please give me some guidance.
How you make out bud?
Same problem not all of us can start out with 200k homes
This wasn't long enough or clear enough
Agreed. Seems like we got background, then opinion, but not a lot of rationalization. Need more of the "why".
Not the best advise.
The interest expense is to high with an amortized loan.
i would suggest a HELOC if you can get enough to cover the cost of the new property, if not a home equity loan. Then get a HELOC, paycheck park your income into the HELOC and pay off the loan in a third of the time.
That's what I plan on doing
Dion sings do wop
No more tax benefit with HELOC now
clifton nj in the house. year 2022.
Home equity loans in Spain are in between 40-50 % of the property...... That will not pull out the 100% of the capital invested :(
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I got a loan of 3500USD and payback interest is super low. Dm @hacker_ltd...Please don't forget to thank a fellow
Is there anybody at the BP team I can talk to about Strategies using a HELOC?
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You rock Brandon!
This vid had about 90 seconds of actual info .
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If you take out a new mortgage on a paid off house, is it considered a cash out refi?
can I get cash out for residential or business?
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Thank you.
GOOD TO KNOW
So this is my question... so basically you going to have loans on top of loans ?
TRUCKER164 yea
I got a loan of 3500USD and payback interest is super low. Dm @hacker_ltd...Please don't forget to thank a fellow
When working with a mortage broke to do a cash out refinance what are some of the fees to look out for?
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Application fee, and general closing costs like an appraisal fee and lender fees
what about owning a property that I want to renovate? I've been trying to find a loan of $60,000 to do so. But with a low income and no job history (i'm 23) it's impossible. :/
+cherrysakura16 That strategy is called Live & Flip! Or BRRR (Buy Rehab Rent Refi) Without 2 year job history it can be very hard to get a loan. In this case, it would be a good idea to save, build credit (if there's room for improvement) and keep contacting lenders. Attend your local REIC and network with people doing it. You never know who may be willing to help you!
BiggerPockets what is the best loan type to do a BRRR AND WHAT TYPE OF REFINANCE PLAN FOR THIS BRRR METHOD. Thank you in advance
@@biggerpockets I'm looking to buy a home soon and i was wondering if its possible to borrow against the house soon after I buy it, basically can I borrow against it with no equity? Thanks.
it would have been cool if he answered the guys question ,
This information was random and sporadic, I can't tell which option is better 🤷🏽♂️
Brandon can speak for himself but I believe he was just explaining the difference between the two and it's up to you to decide which is best based on your own unique circumstance
I have a home I bought only 3 years ago with a VA loan. I received a pretty good rate. I don't have a lot of equity built up, but we want to purchase an inground pool. Am I better off getting a Home Equity loan(med. rate, low/no closing), Cash out refinance(low rate, high closing, restarting my clock) or personal loan (high rate, no closing, unsecured)? It's all so much and I cant figure out whats best.
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@@user-jx3if1xn7g stfu
i registered an account but it was closed immediately
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I got a loan of 3500USD and payback interest is super low. Dm @hacker_ltd...Please don't forget to thank a fellow
Woof woof!
45 seconds of wasted time in the beginning. Consider cutting that
The podcasts are brutal, its a bunch of unnecessary chit chat
I hate their podcasts and stopped listening because they just waste time pffafing vs getting to the point. However enjoyed this video. Thanks.
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