Having liquid cash rather than equity trapped in a home is better.

If you do pay down the loan each month the equity is largely trapped so not easy to access if you really need it.John Corey

I will also segregate the damage deposit.In NC the courts look to see if it walks like a duck, quacks like a duck, and swims like a duck.. if it does then the court will call it a duck...I always advise my client to tell me what they want and then I make sure my documents will lead to that end.This can be tricky and filled with traps for the unwary..

Don't get caught in the trap of focusing all of your energies on improving on your weaknesses, Instead focus on becoming stronger, in areas that you are already strong at.

I fell into this exact same trap.

Don't be trapped by dogma — which is living with the results of other people's thinking.

This lets you leverage your capital to do more deals.The refi for most investors is to get the lower rate locked in and get some cash back to invest again.If you run out of cash or have "trapped equity" and little cash left then you have to partner with other investors to do deals.I have seen it work sometimes but generally it is a mess unless you can do multiple deals with one partner instead of partnering with one investor for this project and another one for the next.The problem with partners is down the road they get different reasons for selling or exiting the property early.I don't see the refinance bank loaning up to 100% of current value and letting you pull out the 30% and get it back.What many investors do is take on a property with maintenance and vacancy issues using hard money.Fix the problems and then create a higher value for the property.In commercial the weight is given to the income approach.So if you had 50 unit building.Units rent for 500 a month but are 50% occupied.So currently 150,000 gross income yearly.Value roughly at a 10 cap at 750,000 going in.You get for 600,000 and put 150,000 in repairs fixing problems.Total funds needed is 750,000.HML says they will fund 525,000 and you put down 225,000.You work hard and get occupancy up over 6 months to 90%.270,000 gross rents with NOI around 135,000.New value at a 10 cap for refi is 1,350,000.Refi at 75% LTV would be 1,012,500.You get 262,500 back and then your original 225,000 you put down based on the new value.I hope I am making sense.

But real estate investing at the scale you are considering in amounts your are talking about is fraught with traps for the uninformed.For example, if you take your 1 million and buy a large complex and hire a property management company, how will you know if you are buying a good cash flowing property if you don't know anything about multifamily analysis.

Will I be "trapped" in this house to keep the low rate?

I also like the speed trap warnings.