I would recommend that you visit several areas/neighborhoods within the Los Angeles area before you make a decision so that you may evaluate your needs vs. cost of housing here. If you keep the property in Chicago, you will need at least 25% down to purchase here. Refinancing may not be worthwhile unless you can save a point. I would also recommend that if you decide to make the move here, rent for 6 months or so in the area you like best to make sure. There are plenty of rentals available in nice neighborhoods (Encino, Sherman Oaks, Studio City) . Contact me if you want to take a look or if you need a reputable lender reference.
I would assume your home in Chicago is a long term hold (more than 5 years) being that you just rented it out.
Based on the cost of borrowing money being historically low and the current prices of homes, I do think it is in your best interest and a great time to cash-out some equity and purchase a home on the West Coast.
Just did a quick quote from today's rates and determined that a 30 year fixed inerest rate on an investment, cash-out refinance to 70% loan-to-value and a 822 fico score is 5.125%.
2) Should you take money out of that house to buy something in LA? I think it is a great time to buy in LA, so I encourage you. The investor in me, however, will want to make sure that you don't cash strap yourself financially. I'd investigate the cost of homes here, figure out what you can afford first, then, if all signs point to go, refi the house, pull cash out and put it down on something here.
I knew lots of investors that got burned by pulling equity out and purchasing other things. Unless you have experience doing so, please be careful and talk to others who have done it. I know from experience there are things that you don't think about in situations like this, and those are the things that bite you later!
I think it really depends on your long term goals. I'm a buy and hold kind of girl so I would hold on the property in Chicago if possible. It's great that you have it rented out, and if you can afford to buy something in LA at the same time, you have a lot of great opportunities here with low interest rates, and low prices (for California!). As others have advised you, you should speak to a reputable lender regarding what makes sense as far as refinancing or taking cash out. BTW I am from Chicago originally...
Let me know if I can be of further assistance...
Keller Williams Westside Realty
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Decide if you are going to buy in LA. Find a house in LA and then decide how much money you will need for the downpayment. Do a feasability study now, look at it on paper after you see what homes cost in California.
Call my anytime if you want to talk it out with someone, I have been selling homes for 31 years, sometimes you just need to talk these things out.
Regarding buying something in LA, are you looking for an investment property? Let me know if I can help find The Right Propertyy at The Right Price for you.
Home Sales Pro
I think you should speak to a loan agent about your current property in Chicago to see exactly what your options would be. Then, after you have that information you could see what your options are here in Los Angeles (Encino). Feel free to contact me for assistance. Thanks.
Los Angeles & Ventura County
Talk to an experienced reputable loan officer to help put the pieces of the puzzle together for you!
If you'd like a recommendation, let me know. I have an amazing loan officer who is based out of the northern suburbs, and he can help you Ben Franklin through your options.