So rates have dipped again and I am in an interesting position. Purchased my primary residence in 2016 for 352K with 20% down with a 30 year loan at 3.875%. House is now estimated at 450K and I owe 268K. We plan on moving out within the next five years so we do not want to refinance into a 20 or 15 year loan.
We are thinking of doing a cash our REFI and holding the money (~90K) in either a CD or high yielding savings account until the market slows down a little to purchase a multi family investment property. We have ~100K in the bank that we have been saving for the investment property, but the extra 90K will help us with the 25% down and 5% reserve required. The cash out REFI will raise our mortgage about $600 a month which is not a big deal for us.
Is this a better option over a HELOC since we plan on moving our to a new primary within five years? My reasoning behind this is to secure the equity we currently have in our house now while the market is high and use this money as leverage for when the market cools off a bit in the coming years (hopefully).
If the market remains the same within the time period we would like to move, we would still have over 20% equity in the house at the time of sale so we would receive that back as well. I have my license and would sell the house myself through the brokerage I work for or have a coworker do it for 0% which has already been agreed upon.
