Homeowner Wanting to Get Started

[Ethan Koyle]

I don't have much savings (almost none) but bought a home 4 years ago and have just over 100k equity in it. Our interest rate is 2.75% so I don't really ever want to refinance or sell.

I work full time and have a traditional 401(k). I am able to borrow up to 50k from my 401(k). If I did that the rate would be around 8.5%.

If I were wanting to buy a different home for my family to live in, and rent out our current home, what would be the best option to finance it?

For a down payment should I borrow against my 401(k), or is there a way to get a better rate with the equity in my current home without refinancing? 

Or should I just wait a few years and save up enough for a down payment?

Also, I would want to fix up our current home a bit before renting it out, which I would need some cash for. And, depending on what kind of deal I could get on a new residence, may need a bit of cash to remodel there also.