HELOC or Refinance to Start Investing in Real Estate

[Raquel Rigby]

We currently have some equity in our home and want to pull it out to start investing in other real estate. We have looked at the options of a HELOC or just refinancing. Each one with different pros and cons. I have heard that it might be better to get HELOC but also maybe better to go with the refinance. So I'm looking of some input as to what other might think.

Here is some info about both of the options:

HELOC:

$32,000 

Viariable int. rate 4.5-18%

10 year withdrawl period

Payment from $50 to potentially $550 at the highest int rate

Refinance:

$54,000 

Fixed interest 4.5-5%

Payment $330 difference 

$2000-3000 closing costs

Any input would be appriciated TIA!

[Justin Robert]

What are your plans for the proceeds? I think that is a factor that could influence which route to go.

Without knowing that and based on the fixed rate aspect as well as the ability to get more cash I would go with the Refinance. I am sure there are benefits to the HELOC; the obvious being the *potentially* lower monthly payment.