How to use your EQUITY to buy another home (step-by-step) 

This is the best video I have seen on how to leverage your current equity to buy another home or investment property. Straight forward, easy to follow, and extremely understandable. Walked away feeling more knowledgable on potential nexts to consider when expanding our real estate portfolio. Thank you!

Here in California, an appraisal is recorded at the county and triggers an increase in property taxes.

5% down payment is crazy to me, I guess I need to look harder in my area. 5% down vs. 20% down makes a huge difference in whether the deal will work or not. Great video around the general concept. Thanks.

1. Pulling equity = loan 2. Using pulled equity as downpayment = another property loan So if im using cash out for downpayment on second property it means i imidately enter 2 loans ? How my cashflow will cover that? What about vacancy? It happens more offten that people talk about on YT It can kill previous Cashflow or even worse ( vacancy)

DUDE. This video is AMAZING. So friggin straight forward and no rambling and extra garbage. Thank you!

Thank you for this info. I just decided to move back in with my mom for a year to get my finances in tip top while I rent out my first home and hopefully earn a little extra cash before applying for a HELOC. My plan was to take out a HELOC loan either to use for the next house or as a safety net in case I need to make any emergency repairs or cover the mortgage between tenants. I read that if my new property will be my primary residence, the 20% down may not be required, is that correct? If I can still do 3.5% then that gives me hope I can swing only using a portion of the HELOC, depending on the value of my next home, and still being able to keep some as that safety net.

Thank you for being so thorough!

Every RU-vidr is saying how to use equity to buy another investment property but nobody isn't mentioning a little detail about pulling the equity of the primary property, will double the monthly payment. In my case from $3,000 to almost $6,000 how am I going to afford that??????

Do you have a video explaining the repayment ? Is it added to your second mortgage or would you have three separate payments?

This is exactly the video I need. Plan to move in 2 years. My home has about 100K in equity ( so they say,fingers crossed). Right now my dti is high. Doing gig jobs to lower that debt to qualify for a heloc to knock out more debt before buying another home. Maybe. I need advice.

Great explanation! Serious question though, why would I use your company or any other 3rd party company to get a loan of equity when I can just go directly to my mortgage bank that owns the loan and ask?

Thank you! Good video. The visuals, slower explanation, and the detail…good job

Bought my home in 2020 for $295K at 3% interest. I currently owe $242K, and it's now valued at around $410K. I would like to buy another house as my primary residence and rent this one out. By taking equity out, does it mean I'll have a higher mortgage on the first house, or would that be a separate loan? Also, my concern is that the interest rate is high, and I'm wondering if I should just wait for it to go down.

Omg thank you so much I understand so much better

Still rocking the ‘stache!! Curious, what are the current rates for a HELOC or Home equity loan? Or is that based on credit scores similar to when buying a home? Didn’t realize how simple it can be, but of course, must plan meticulously. Keep teaching sir!!

Great info!

So do you have to pay off two loans at once with a home equity loan / HELOC?

What about repaying the HELOC? Would be nice to include how much repayment would be monthly for this example. HELOC’s sound like free money bc no one mentions you have to pay it back, don’t you?

why not also talk about "Home Equity Agreement" ?

You mentioned in the beginning "not having to refi into a higher interest rate" then it occurred to me you're talking about your current home. The fact of the matter is a HELOC for example is quite expensive right now so the interest you'll be paying on the money you're borrowing from your home equity will be higher than even the crazy high rates ATM. Please prove me wrong. I'd love to hear of perhaps a new loan program I'm not aware about

So... Tell me if I am doing this right... Value now is 265k and our remaining loan is 104k.... Even though when we purchase it was only values at like 120k... That means we have 161k in equity??

Bruh If you debt to income ain’t on point. Your down payment done mean shut!

How much of a hit does your credit score take after taking out a HELOC to buy a new home?

This sounds risky.. but i am looking to doing this since my fsmily got bigger. But i dont want to sell but it seems easier to sell

If i am buying a second home from my mom at the remaining balance (giving me over $200k of instant equity and a long term tenant) will I still need a down payment as an investment property?

Can you provide estimate of interest rate for HELOCs and other methods mentioned? thanks

If I need to take some money out to do renovations to the house then buy another is that possible?

So I have around $300k equity in my house. Ill probably only be able to pull $240k. Can I take out a heloc to use as a downpayment for a large investment rental income property in another city? That's what Im trying to figure out.

What if rental income from first property doesn’t cover both mortgage and HELOC payments? Do I take that hit until the 2nd rental property starts to cover it?

Good video however what’s the interest rate that you pay on the money you pulled out for your HELOC? Also where are you getting another Loan for 400k and putting 5percent down (20k) nowadays?

What is a purpose of it?? It's so confusing! If you take out the equity from a Property 1 for buying Property 2, then how will that affect Property 1?? You didn't tell anything about it!! In your example a new house mv is 500k and you got 200k equity, then your mortgage will increase by those 200k, so you will owe now 500k with a current interest rate or the old rate?

Very informative. You were clear in your explanations and examples. Thank you!

Thank you sir

So if I own my house will this be easier ? Really wanting to take the step to get a loan on my house and buy another home to have someone rent it out

Thank you. What do you suggest if you own the home outright and want to use the "equity" to buy a second home? Thank you.

The math at 12:54 is wrong. Answer should be $97,500

I feel like you made this video just for me 😊 right up my alley.

Another important point not covered in this video is that with a Refi Cash-out you can expect to pay closing cost for the new mortgage.

Can I do a heloc in TX to buy in WV

Can the equity transfer to the new owner of the home once it's purchased or does the equity reset once a new owner purchases the home?

Good Educational Content

Great info. Too pretty, kept getting distracted.

With a home equity loan the current loan won’t be touched in terms of rates. But what will the equity loan rate be based on? Is it based on the current market?

great explanation! very detailed..... thanks for keeping it simply and not complicated.

Save yourself 16 minutes. Sell your existing home for more than you owe on the loan. The difference is your profit from the equity or the increase in value on your home over the years you’ve lived in it. Use that profit to buy your next home. Just know that the market has likely changed from when you purchased your previous home and you’ll likely get a different interest rate even if you have money to put down. In short, you might be able to afford as much home as you think because home values and interest rates are up. Maybe you’ll get lucky. Cheers!

I understand that, but what is the interest a month on that helloc??? Is that per month? Also does it stop till you pay that back the helloc.

Please note $350,000 x 85% is $297,500 leaving $97,500 for the 2nd lien avail

Good video, but too much base on that mic

Amen 🙏🏽 ❤ You better say it Mother 🙌🏽 She right about it! Know your worth and knows who you are in Christ Jesus !

GREAT BC IM WORKING ON MY FICO TO BE OVER 740 BY OCT-DEC TIMEFRAME, WANT TO SELL & THEN BUY IN ANOTHER STATE & I COULDNT FIGURE OUT HOW I WAS GOING TO DO THAT. JUST NEED TO KNOW IF THERE IS A PRE PAYMENT PENALTY ON HELOC

Great video. Is there closing coast in a home equity loan?

The only way to get the money out of your home is to sell it. Anything else is simply more debt. Of course you can use the debt to gain more income but make no mistake you are deeper in debt disguised as “equity”.

Our home is paid in full. Would this still be a wise decision?

Hey with the home equity loan when it says lump sum everything comes at once ?

I’ve had this idea, my home is paid off. We’re building our dream on adjoining property we own as soon as my builder is available (could be 1.5 years). Tax appraisal went up $100k this year. Any advantage to using this equity instead of a construction loan to finance any portion we are not paying cash for.? Then just paycheck park to that heloc. Long term rent or even short term rental as a possibility for our old home. I have no interest in a long term mortgage with these rates.

What if the first home value you bought decrease in its market value. That is you bought it in 300000 dollars and it drops to 250000 dollars, do we still have the Equity.

I haven’t found anyone Bank that will allow this.

Great video as always! I'm currently in a position where if I wanted to buy my next home, I do not have enough equity to do something like this, since I'm still pretty close to 95% ltv with my primary loan (bought in Sept 2022). I'm currently in the process of getting hired in a new job outside of town and my only solution seems to be sticking to a long commute. My current housing DTI sits as 19%, so maybe if I just save enough to put down 5% on my next home and then rent out my first home, I might be able to afford it, just have to make sure that all payments are within the DTI constraint of the new loan. Thoughts on this?

Can i get a Heloc, sell my house and use VA loan to. purchase another home? I know with Va loan you don't need a down payment but i would like to put money down to make the mortgage affordable.

This helped so much. Finally someone explained it step by step. I have enough equity to move primary residences with a HELOC. Thank you.

So i brought land then built a house. Do the same guidelines apply if i was to use the equity to buy maybe 2 investment properties straight up? Or are the rules different when using equity to potentially buy investment properties?

I have to pay back the home equity loan ?

Great Video . Great Info. Learned some new today. Thank you !!!

Who do you speak to get the money out?

What is the monthly payment based on with the HELOC?

Excellent video!

Can you explain if you own the home without mortgage.

I ask you why to use this house to buy this house! Then you get into pay more property taxes you pay more for utilities more maintenance and upkeep! Bigger is not always better!!

I own my home outright. I want to move in about 10 months. How easy to get a cash out mortgage? And how many months before I am moving would it be prudent to do this? I want to move and not have pressure to sell/buy within a certain time. When I bought this house, it was contingent on the sale of my other house.. and the pressure was high. I want to move, find something I like at my leisure and availability having the cash available at a moments notice, but not paying high mortgage/interest/insurance/taxes for a very long time. 6 months? 3 months? a month? What do you suggest? Once I find the 'one' I plan to put this one on the market. I live in SWFL and lots of people are moving here so it won't be too difficult to sell.

What about HELOC’s in Texas?

So, go from 1 mortgage to 3

I have a paid for home in which I live in. I have a 2nd home in which I rent out. I was thinking of obtaining a heloc to use for a down payment on a long term rental. I understand the variability of the heloc but I essentially have no debt so I’d be willing to pay the heloc long term or until my rental property cash flows to pay it. I think the opportunity of owning another property outweighs the risk of the heloc I’m also in the medical field have been at the same job for 20 years and make over 6 figures. In my situation do you think the heloc for long term rental is a good idea?

At 15:00 you mention they can use equity to buy a new home and renters will basically pay for the new home. Here's my question! The first home that you have is not paid for and then you're renting it out, your renters will basically be paying the mortgage on your first house and you will be stuck with paying the note on the 2nd house. I could see the benefit of it ONLY IF RENTERS pay rent for a home that's paid for. Or am I misunderstanding

But why? Why do we have such a desire to always want to upgrade? Property tax, utilities, upkeep would all be so much higher. I guarantee majority of the people domt even use more than 70% of their upgraded large houses.

Damn, I own my home so I'm screwed huh.

I would like to buy my first investment home. I have built enough equity in my primary home. I have cash too. What would you advise to do to pull some of my equity to pay for down payment and rather invest cash into syndication with 17% annual return or just pay cash for down payment. What would be the wise thing to do ?

Do you have to be living in the home? The home that I need the HELOC or cash out one is an inherited house.

Can you keep the payment around the same if you are going back to a 30 year loan?? I have 120k in equity and have 77k left to pay over a 12 year period. I lived in the house for 18 years. I want to take that and buy a rental… is this even an option?

Where can we get the home Equity loan

Hi. May I know what software you are using that enables you to record a video of yourself while sharing what you write on your notes real time? Thanks!

Fantastic Info, Thank you!!!!! ❤❤❤❤

What if your house is payed off and the only income is social security?

Very informative! Thank you so much!

v helpful. Thank you!

Good video

Sure…. Just never, ever forget: leverage works in _both_ directions.

Ok

1. Banks always reduce market equity. 2. Now got 2 property tax payments for both homes. If u live in 5 most popular states or new SouthEastern tech states,= big cash bill.

Thank you, this is very helpful. My first home rent not only pays for the mortgage, but it also provides me about 1000$ which I can put down toward my new home.

I've completely paid off my home.. and I would like to borrow against it to buy my next house.. having no existing mortgage will I have to do anything different?

Thank you so freakin much for explaining this. Very informative and loved the details your gave.

I inherited some money and used most of it to buy a house. It's A big property and house. My first house. I don't have much money left. Also having trouble getting a job. I realize now that I hate owning a house. I want to upgrade to a condo and sell this damn thing. Less headache and probably cheaper. I'm hoping this video will help me do such a thing.

I was just wondering about this exact topic, and this was so helpful! Would you be able to make another video discussing using equity to pay down things like student loans? Like what are the pros and cons of doing that? Thanks!!

Why would you pull out the equity if you're selling? Seems to only be necessary if you're keeping both homes or renting out the old home?

I wish you added an example of a cash out refi in the video. Still loved it though awesome vid

nice

Perfectly explained 👌 Very easy to understand and great examples.. will be calling soon

Thanks for video!

I heard on another channel that you cannot use 75% of rental income towards your 2nd home if it will be owner occupied…you can only use that income if you are getting an investment property as your 2nd home ..is this information correct ? I was a little confused because I do want to move out of my primary and rent it out and buy and occupy the 2nd home. Just trying to figure out my DTI …great information btw thank you!

How can I contact you privatly? I need your help.