Here's the story, I have a mortgage loan of about $210k, which I have been paying for the last 10 years. I pay about $1400 monthly mortgage, with 2% interest rate until 2052, when I will have completed my last payment. Only thing is I am almost 60 years old with no savings(kids in college)! My current home value is about 400k. I think this is a good time to invest in property, and I see this mother/daughter home I really like for a bit under 300k. This home could have a potential rental income of $3100 monthly (about 10% CAP rate).
Can I use my home's equity to pay the down payment/closing cost, maybe 75k?, on this investment property? Is this a good idea? Would it make sense to get a 15-yr fixed rate mortgage on this investment property? I really want to get rid of my bad loan, the mortgage on my current home, and I think this might be a good method. Also, should I put the rental income into a redraw account to use against my mortgage. I really want to own my home by the time I retire and not rely on social security alone.
Read more: Need financial advice about investment property, equity, offset/redraw account?
