Refinance Primary Home For Second Home
REM #F675
By Ilyce R. Glink
Summary: A reader would like to build a second home. Ilyce suggests taking the equity out of their primary home in order to finance the second house.
Q: We would like to build a second home in another state and use the equity
in our primary home to build it.
We have approximately 300K of equity. Our plan is to eventually (2 years) sell our primary and move to new home. Can we refinance and take the equity to build second home, leaving us with one large mortgage, or is there a better way to do it?
A: That sounds like a fine way to do it to me, particularly since you'll pay
a higher rate of interest on a home equity loan than on a primary loan.
Interest rates are still relatively low. Since you already have a plan for the
cash, try to refinance quickly in order to take advantage of low rates.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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