HELOC or Refinance to fund first property?

2 Replies

Hi everyone,

I'm a newbie looking to get a first deal this year.  I have a question in regards to the financing portion and what others may have done:

I have a HELOC on my primary residence which I could easily use to fund my downpayment. However another option I've heard is to re-finance my principal mortgage to pull equity out and consolidate the downpayment and remaining mortgage amount. I see it as pros/cons in either scenario. Does anyone have any thoughts on which scenario would be best?

@AJ Alexander I did the refinance option several years ago on my primary so I guess I'd prefer that. 

The main reason I liked that is that the cash out was tied to the great terms of a primary home (low interest rate and 30 years amortization).

Originally posted by @AJ Alexander :

Hi everyone,

I'm a newbie looking to get a first deal this year.  I have a question in regards to the financing portion and what others may have done:

I have a HELOC on my primary residence which I could easily use to fund my downpayment. However another option I've heard is to re-finance my principal mortgage to pull equity out and consolidate the downpayment and remaining mortgage amount. I see it as pros/cons in either scenario. Does anyone have any thoughts on which scenario would be best?

We have 3.6 % with 30 years on our primary. Nobody would give us anything closer with cashout refinance. So we decided to take out HELOC with 3.99 fixed rate ,3 years draw period and 10 years Amortization , $0 closings costs. We did that in December of last year and still didn't use it, searching for the right deal. If we woud refinance in December we woud have to pay right away. With HELOC our payment will start the minute I use it.

But every situation is different. If it makes sense to refinance with better terms - go for it.