I've found a deal I'm interested in (my first..) and am planning to finance it using the equity in my primary residence (currently, I have no mortgage on it so this would be the only loan against it). I thought a HELOC would be better than a home loan because it is "reusable" but the variable interest rates make me nervous given the current rate environment. My question is, is it worth taking on the risk of variable interest rates to have to flexibility of a HELOC (i. E. As soon as I refinance this first property, the full amount of the HELOC will be available to use again and will not hold up future deals) or is the loan with the fixed rate better, despite the fact that I have to reapply every time I want a new one, given we are currently in a "rising" interest rate environment?
It depends on the condition on the house you want to buy. If it's not move in condition, most conventional lenders will not lend on it. So you would need to use cash (HELOC) to buy it. Plus cash offers are more attractive to the seller.
And yes, once you have a HELOC, you can reuse it again once you pay it off with a conventional loan.
A lot of people started this way including my wife and I.
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