Home Loan vs. HELOC to finance my first deal?

2 Replies


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?

HELOC would be good option if you are planning to use these fund for shorter period like flipping. Otherwise cash out will be good option.

Ideally what I was thinking is I'd like the HELOC so I can refinance the house after about a year and then have the HELOC to use again for another purchase, as opposed to the loan which I'll have to keep replaying for

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