Cash out Refinance and Appreciation

[Jake Walton]

Question: With the recent surge in home prices and appreciation, I wanted to get some opinions on doing a cash out refinance should there be a correction in the market to take advantage of increased equity to plan for a future purchase.

I’m not looking to sell my primary residence, but rather rent it out and purchase another primary residence property once the market cools a little.

My thought is if I can do a cash out refinance, while keeping my mortgage the same that I’m currently paying, it would make sense to use that cash as my down payment on our next home while renting out our current place. That way I get equity without selling and add a rental.

Looking for others to poke holes in my plan or confirm my thinking here.

Thanks!