Why a Cash-Out Refinance Could Be Your Path to Second Home Ownership
A cash-out refi lets you use your current home's equity to buy a second home. You do this by replacing your existing mortgage with a larger loan, and the extra cash from the new loan is used to finance your next property. Key Requirements: At least 20% equity in your current home Credit score of 620 or higher Debt-to-income ratio of 43% or less 6-month waiting period after your original mortgage closing How Much Cash Can You Access? Most lenders allow up to an 80% loan-to-value ratio Example: $400,000 home value - $250,000 current mortgage = up to $70,000 cash out Closing costs typically range from 2-5% of the loan amount Timeline: The process usually takes 30-60 days to complete Many homeowners find that their primary residence holds the key…