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Is this a dumb plan? Pull out equity cash now, buy later?

Here’s the deal. We are in the process of refinancing (got the low rate from a few weeks back) and are pulling some cash from equity for various things. We haven’t gotten the appraisal back but expect we have about 35-40% equity.

We have also been thinking about buying a new house and renting out current home.

Would it be terrible idea to pull more cash from equity now since that’s in process and keep it aside for a down payment later? The hope would be that house prices drop, but we can afford one even if they don’t.

The plan would be to keep our current house as a rental. We live in a high income, high rent area and we think we can just about break even or a bit better on the mortgage with what it will rent for.

Our jobs are very stable, so that is not a concern.

I guess worst case we could end up owing more than is our house is worth and then have problems with our tenants. We can afford to cover loose ends but not a six month eviction process if it came to that.

Thanks for any input. We are far from experts in this area.

submitted by /u/zimzamzum
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source https://www.reddit.com/r/RealEstate/comments/frgth4/is_this_a_dumb_plan_pull_out_equity_cash_now_buy/
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