My Dilemma on Financing options

[Steve Tse]

Hi BPs nation, I am a new OOS investor looking to purchase my first property so my question is about a method of financing. I have two financing options:

Method #1 is a conventional 30 year mortgage @ 3.87% interest rate with 25% down on a MFH

Method #2 is HELOC loan that I can get at 3.5% interest rate by borrowing up to $180K or 4.24% rate if I was to borrow $230k

My dilemma here is which method makes more sense in general ?

Benefits of HELOC:

1) Give me a more completive edge in the market (as a cash buyer) 

2. No out of pocket expenses for down payment (everything is covered by the loan)

3. I can refinance later to lock a batter, fixed rate

4. Borrow as much money as I need (up to $180k or $230k) when a good deal comes around

Benefits of a conventional loan:

1. I can lock a good rate for a longer time and not worry about rate fluctuations in the near future 

2. My primary residence won't be tide up in HELOC

Thank you for your feedback !