Stay at home mom in Auburn, Wa!

[Kerri Junio]

Hello everyone! My name is Kerri Junio. I live in Auburn, Wa which is about 30 miles south of Seattle. I have a husband and two young daughters. I currently am a stay at home mom so my husband can focus on establishing his career as a real estate broker. I would love to get to know some people who may be in the same situation as me where my life is pretty dedicated to my family but would love the opportunity to branch out into a REI career. I really am a total newbie and don't even know which direction I want to go in. I would just love the financial freedom as I feel like my husband works 24/7 just to pay bills and we barely travel. We would like to pay off some debt so he can leave his other job and focus on being a realtor but I feel so helpless in not helping financially. I must say it's really scary trying to pursue a REI path because I don't even know where to start. I would love to get mentored and even shadow an investor around but I highly doubt someone will do that for free. Sometimes as I read the forums I find myself getting a little lost in not knowing the lingo in finances, laws, etc. I know for sure I will order a couple books on real estate investing hoping that will give me a little more insight.

I would like to add we currently live in a home where we built up a lot of equity. I keep hearing about HELOC and I need to ask our lender if she can give me some insight about that. We are considering refinancing to pay off some debt and take out our PMI to lower our monthly pay down. The only downfall would be that we would go from a 3.8% interest rate to I believe 5%. We are also motivated in doing this so we can take my husbands father and step mom out of the loan because they co-signed for us when we originally purchased the house.

With that being said, we would love to pay off debt and lower our payments so my husband can leave his other job but on the other hand, i'm wondering if it would be a better option to obtain a cash out loan for an investment property. Would that even be possible when we already live in our house and pay the mortage? 

Sorry for making this long and wow would I appreciate someone responding to this because it's a lot of info!

-Kerri

[Joe Splitrock]

@Kerri Junio first of all welcome to BP. Don't worry so much about all the terminology. If you keep reading the forums, read books and listen to the podcast, you will figure it all out. 

First of all you mentioned PMI which is mortgage insurance. That is required when you don't have a sufficient down payment. You mention that you have built up lots of equity. PMI is usually dropped once you reach a certain pay down or can prove a certain amount of equity. You probably don't need to refinance to get rid of PMI. Usually you can pay for an appraisal and based on current home value, they can remove PMI from your existing loan. The equity amount can vary. I have heard of some requiring as much as 40% equity to remove PMI. I know that seems strange, since PMI is required if you don't have 20% down, but when removing it the threshold changes.

As far as a HELOC, that is a home equity line of credit, so this also comes down to equity. Probably best to look at the PMI issue first.

Good luck and welcome!