Refinancing Your Current Home – Fiscal Imprudence or a Good Idea?

Written by: Adiel Gorel

How Refinancing Your Current Home Gives You a Real Shot At Wealth Creation Investors often ask me this – is it advisable to refinance my current homes and use that as down payment to buy more homes? The reason they ask is that ‘refinancing’ is something of a bad word in some circles. For some, […]

Published on August 3, 2022

Last update: 3 months ago

Est. Reading: 3 minutes

How Refinancing Your Current Home Gives You a Real Shot At Wealth Creation

Investors often ask me this – is it advisable to refinance my current homes and use that as down payment to buy more homes? The reason they ask is that ‘refinancing’ is something of a bad word in some circles. For some, the very word smacks of risk and fiscal imprudence. For me, however, this has been a great option and one that I have used frequently. Let me explain how I made it work for me and how you can make it work for you:

Why refinancing is a good idea.

So you are still paying for your house – the one you live in or the one you have bought as an investment. Should you refinance this? A lot of people would caution you against this. And to be sure this option is not for everyone. If you are an aggressive investor and someone who is willing to step out of your financial comfort zone, this is a great option for you.

If you're someone who imagines wealth in your future and not a scenario where you're just getting by, this is for you.

So depending upon the interest rates at the time, you can take a call about refinancing your current assets. This generates a significant cash flow, and one that is tax free, by the way. This cash flow is then used for the purchase of a new home. You use it to make the down payment for this new home. This is something that I have done myself, because my aim was always to buy as many homes as possible. To my mind any asset you currently own represents the potential for creating more assets for you; more wealth for you in times to come. It would be a shame not to capitalize on that!

Don’t regret your decision later.

Now there are a great many of our investors who have been fiscally conservative, unwilling to take any chance that they saw as risky. However, over the years they would realize how it is possible to ‘make money from money’. There would then be some amount of regret that they didn’t go ahead and buy more homes. I have often heard investors saying this: “I wish I had bought more homes.” They could have used the refinancing option to buy more homes but they did not. They could have been even wealthier in their retirement years than they ended up being.

Refinancing your current home may seem risky but it really is not – it is a well calculated risk at best and one that pays over the long term. When you refinance your home you generate cash flow to make the downpayment for a new home, which will soon start to generate a rental income. This will soon create a positive cash flow or help you break even at any rate. Find out more about this option in my latest video.

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ICG uses single-family home investments, bought in advantageous locations and the best U.S. markets. We enable you to enjoy the clout that comes from purchasing a multitude of houses, even if you only buy one.