Using HELOC to pay off debt and downpayment
Homeowner · Buckeye Lake, OH · Member since 2021 · 5 posts · 1 vote
HI BP. I am very new to this community. I have listened to podcasts and read on other groups about real estate investing. I currently have one primary residence SFH, looking for it to be rented out once I get my two years in. How do I even get started with credit card debt which I'm currently trying to use HELOC to pay for it. Is it possible to do both? Lender said I can get up to 25k in HELOC. I have 17k in debt. I feel it seems impossible for me to even move forward with the debt I'm having. I want to get a duplex right now and start house hacking it, and move from there to buying more properties each year or two. Any advice on what I can do. Should I sell my house, pay off my credit card debt and use the rest for downpayment for a duplex or use HELOC, rent out my house and pay back the HELOC and save for a downpayment for a duplex? Thank you in advance..... Really want to start in real estate journey. Goal is to have at least 3 units in 5 years. Is that even possible?
First step is figure out why you are in debt. Was there something that happened once (eg medical bill) or is it that you are spending more than you are making? If the latter, create a budget and figure out where to cut your spending and/or increase your income.
You can do a HELOC to help pay off your credit card debt, but what interest rate would the HELOC be vs the credit card debt? And again, if the debt is due to ongoing expenses, borrowing money to pay it down won't solve the problem permanently.
Do you live by yourself? Could you rent out a room or two to help pay down your debt?
First step is figure out why you are in debt. Was there something that happened once (eg medical bill) or is it that you are spending more than you are making? If the latter, create a budget and figure out where to cut your spending and/or increase your income.
You can do a HELOC to help pay off your credit card debt, but what interest rate would the HELOC be vs the credit card debt? And again, if the debt is due to ongoing expenses, borrowing money to pay it down won't solve the problem permanently.
Do you live by yourself? Could you rent out a room or two to help pay down your debt?
Hello thanks for the reply, I am currently not trying to spend any more to pay off my debt, I am living within my means now as to back then.
I talked to a loan officer and is giving me 4% interest rate with no appraisal, as per my credit card is at 17.99% which for sure would help me out.
I honestly have not thought of just renting out my room as I think I didn't want to have anybody else live with me, I do live alone, and if I rent my whole house out, I'd have to rent out a studio for less. I have 3 bedrooms, would be wise to rent the 2 out for sure. Currently doing it as STR.
I feel I need to live uncomfortably just to get to my goal with first paying off my debt, then getting a duplex.
First step is figure out why you are in debt. Was there something that happened once (eg medical bill) or is it that you are spending more than you are making? If the latter, create a budget and figure out where to cut your spending and/or increase your income.
You can do a HELOC to help pay off your credit card debt, but what interest rate would the HELOC be vs the credit card debt? And again, if the debt is due to ongoing expenses, borrowing money to pay it down won't solve the problem permanently.
Do you live by yourself? Could you rent out a room or two to help pay down your debt?
Hello thanks for the reply, I am currently not trying to spend any more to pay off my debt, I am living within my means now as to back then.
I talked to a loan officer and is giving me 4% interest rate with no appraisal, as per my credit card is at 17.99% which for sure would help me out.
I honestly have not thought of just renting out my room as I think I didn't want to have anybody else live with me, I do live alone, and if I rent my whole house out, I'd have to rent out a studio for less. I have 3 bedrooms, would be wise to rent the 2 out for sure. Currently doing it as STR.
I feel I need to live uncomfortably just to get to my goal with first paying off my debt, then getting a duplex.
Not everyone wants roommates, I get that. 18% interest on the credit card is pretty normal for credit cards, but also a high interest rate, so you are smart to pay that down as quickly as you can and not adding more to it.