Wholesaler · Colorado Springs, CO · Member since 2009 · 286 posts · 255 votes
16y
HELOC if you can get a good rate. Should be the least expensive to get, still really good rates, and you can put the cash back when/if you're not using it so as not to pay interest.
Investor and Architect · Ramsey, NJ · Member since 2010 · 305 posts · 84 votes
16y
That is what I like about it also. I just have this concern that if there is a double dip in housing or some other event which leads lenders to tighten, then they might lessen it or even possibly freeze it. Perhaps if I see it coming though I may be able to write the check and deposit the money into my account before the freeze. This concern/fear is the only reason why I would consider a Home Eq Loan. Do you or anyone else have such a concern/fear? Does it seem irrational?
Rental Property Investor · St. Louis, MO · Member since 2008 · 189 posts · 75 votes
16y
Hey Larry,
I have been using a HELOC for the past 3 years and shared your same concerns over it being cut. It is with US bank who was cutting HELOCs pretty aggressively 1-2 years ago but I was not affected. Actually was kind of suprised since my HELOC was for more than my mortgage. Its hard to beat the initial cost, flexibility, and interest only payments of a HELOC.
Good Luck.
Investor and Architect · Ramsey, NJ · Member since 2010 · 305 posts · 84 votes
16y
Thanks for that info Mike. That makes me feel better about going the HELOC route.
Question for you..... I am wondering if your HELOC had drawn money and was being repaid promptly/regularly when your bank began cutting the other's HELOCs. Or on the other hand was yours dormant/had not drawn any funds yet.
Rental Property Investor · St. Louis, MO · Member since 2008 · 189 posts · 75 votes
16y
Larry,
During the time that US Bank HELOCs were being cut I was actively using mine. I had around a 40K balance and was moving 20-30K in and out of it several times a year. And yes, I was promptly paying on it.
Private Financing Consultant · Honolulu, HI · Member since 2010 · 132 posts · 27 votes
16y
Larry,
You should check with your local lender to see if you can qualify for a cash out loan and if you are able to secure another loan for the investment as you use the case as down payment... and make sure that you are able to maintain the payments once the loans are made.
Otherwise, consider other ways of raising money for your deal.
Investor and Architect · Ramsey, NJ · Member since 2010 · 305 posts · 84 votes
16y
I am considering a full cash out refi also. Plus is a fixed low rate. Negative is higher cost to get in and a higher monthly payment even while I am not yet using it. I figure 200k at 5% will be 10k per year or $833 per month. I'd rather only have to make higher payments while I am generating some income from the borrowed money.