Should I Open A Line Of Credit?

1 Reply

I keep hearing about people saying they are opening unsecured lines of credit. I'm wondering if this is a good or bad thing to do? It seems like a good way to finance your earnest money or your down payments and then refinance? Do I just walk into my local bank and ask them what i'd qualify for as an unsecured line of credit? What are some best ways to go about doing this or should i use a different method to fund my down payments? 

thanks,

Jason

Hi Jason,

When used responsibly, lines of credit can be very helpful in growing your business. If you can get a cash-out refi down the line, the LOC allows you to come up with down payment you might not have come up with otherwise. The main thing about LOC's is to always have an exit strategy to pay them off such as a refi or completing a flip and so on. I'd call the bank before I walked in, but you can usually get most of the basic information off the internet such interest rate, minimum amount, etc. But if you want all of the details, you'll have to speak with a loan officer.