Investor · Roseville, CA · Member since 2018 · 4 posts · 0 votes
Hello,
I'm looking at opening up a HELOC on my primary residence to use as seed money to start investing. What are some of most important things to look for in securing a HELOC? Who are the best banks to get these types of HELOCs with?
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
7y
It depends on what is important to you. If you are going to use the funds to buy another house, renovate it, rent it and refinance it, you must also know that the HELOC will contribute to your debt-to-income ratio. This may make it difficult to refinance later. Talk with your intended refinance broker sooner rather than later.
High loan to value LTV will give you the most of your equity, but at higher rates. The lender I am using right now has a 5/5 HELOC that adjusts once every 5 years, at 75% LTV for an owner occupied mortgage
This same lender has a 5.25% variable rate for 80% LTV but goes up to 6.25% at 90% LTV
Interest only will give you low payments now...and higher payments later
A home equity loan is often a fixed rate second mortgage, instead of a revolving line