So you want to take part in the investment real estate, but you just do not have any extra money to get started? It happens, but what most people do not realize that you may already have enough resources to get started. If you have your own house, you can use the asset, and will be well on your way many times.
If you bought a house with interest only loan, you are building equity every time you make a mortgage payment. To find out how much equity in your home, subtract the balance on your mortgage from the value of your home. If you have any other loans tied to home, or other obligations, to subtract them. Most people were surprised to see how many shares they have in reality. In many cases, it is more than enough for a down payment and to improve the investment property.
There are several ways you can use your home equity to raise cash for real estate investments. Here’s the basic:
1. Refinancing your home. You can refinance your home in order to increase interest rates, but you can also get cash out refinance mortgage loan, and the use of cash for the purchase of investment property, or you must have at least enough for a down payment. Your current lender may be entitled to cash in refinancing, so check with your mortgage consultant before you start this process. Keep in mind, cash out refinance mortgage may have higher interest rates of mortgage loans than others.
2. Take Home equity loan. Home equity loan is a loan using the equity in your home as collateral, and regardless of your mortgage. The amount of credit on the basis of shares in your home, you can get 90% or more of the value of your home, and less if you are taking out home equity loan on a second property that you do not occupy. The advantages of home equity loan to pay back a loan early without penalty, and you can pay off those high interest credit cards.
3. Go to home equity line of credit. Home equity line of credit loans, like credit card. As home equity loan amount limit based on credit and equity in your home. You can transfer money from your home equity line of credit, or even write checks directly from your account. Interest rates are generally lower than cash out refinance mortgage loans, and are tax advantages as well. Another advantage of this is just the interest payments and payments on the amount you must, but not the entire amount of the loan. You can also have the opportunity to review in the future at a higher line of credit when the equity in your home increases, especially if you made the minimum payments on a timely basis, or to improve housing conditions.
Investing in real estate not only for the rich, the average homeowner can be a real estate investor, even without a lot of money in your bank account. You can use the cash from the refinancing of mortgage loans, home equity loans, home equity lines of credit for the purchase of the first investment property, as well as many other properties in the future.