Need your creativity

[Jeremy Clarke]

So I own a rental property here in Denver. It has between $250k-$300k of equity in it at 3.25% interest rate. I gross about $1,200 a month after I pay the mortgage. Mortgage is $2,500, rent is $3,750. 

I'm looking to purchase a primary residence in Denver but don't have the cash for a downpayment at the moment. I'm potentially looking to take equity out of that house to buy another. I'm concerned a cash-out refi isn't a great idea because of the current interest rate I have. What are your thoughts? Should I do a Cash-Out refi, see if i can get a heloc, other options I'm not thinking of? 

[Brittany Guimond]

Hi Jeremy! I have a few clients in this exact situation in Denver right now. We explored cash out refi but just don't like how the numbers are looking, so we decided to go the HELOC route. We called around to a few different banks and I actually have notes I can share with you if you're interested, but ultimately decided to go with Security Service Federal Credit Union because they've got a 5.99 intro rate for 12 months and will loan 100% LTV. Since you'll be buying a new primary, you'll get to take advantage of the low down payment requirement, but might want to explore what 10, 15 and 20% looks like and what that does to your payment. The HELOC has a variable rate, so I recommend reviewing several scenarios with a lender to know what feels the most right for you and your lifestyle. I've got both lender and HELOC contacts I'd be happy to share, I'll shoot you a DM and we can chat.