Technically, you can get a home equity loan as soon as you buy a home. However, home equity increases slowly, which means it may be a while before you have enough capital to qualify for a loan. It can take five to seven years to start paying your mortgage principal and start building up equity. Technically, you can apply for a home equity loan, HELOC, or cash-out refinance as soon as you buy a home.
Restructuring your original mortgage with refinancing can help you set lower interest rates or change your repayment terms to increase or reduce monthly payments as you prefer. When your refinanced mortgage loan is greater than what you owe on the original mortgage, you have the ability to “cash out the additional funds.” Your ability to get cash-out refinance will largely depend on how much capital you already have in the house, which will increase the amount of cash you can receive.