Cash Out Refinance Questions

[Andrew T.]

I'm curious about the best way to make the equity in my Toronto rental property more productive. My mortgage term is coming up in April and instead of a straight renewal, I was considering a refinance. My goal is to further expand my REI portfolio with another investment property, possibly a duplex to house hack in Montreal.

Current property value: 470k, Mortgage: 175k, Available equity (80%): approx 200k.

A few basic questions never dealing with a refinance before, 

1. How is the available equity transferred to be open for use? Where does it live? 

2. Are there geographical limitations to where I can use the available equity? ie. rental property with equity is in Toronto, but new investment property is in Montreal. 

3. Given the mortgage payments for the full amount (375k) begin once the term starts, is the available equity simply idle until it is used to purchase another property? Are there limitations/timelines to use it? For example, if I am still searching for a suitable property to purchase after the term starts.

4. Given I have no other debts, how will this impact my debt ratio in being able to qualify for an additional mortgage. For example, if I find a property for 500k, I would put down the 200k from available equity and have to qualify for a 300k mortgage. How will lenders look at the situation given the 375k debt load plus an additional 300k? Would I seemingly have to qualify for a 675k loan (375k + 300k)?

5. Is there another strategy to use the equity more productively?

Thanks BP community.