HELOC or retirement savings?

[Tracy Schiller]

We are looking to purchase our first rental property. We have an enormous amount of equity ($600k+) in our primary home, and we currently have a 15yr mortgage with an interest rate of 1.99%. We don't want to do a cash out refi and lose that interest rate, so we are thinking of a HELOC.

Here are some questions/situational facts:

• Do most banks generally let you do a HELOC for investment purposes, or would we have to go with an investor-specific lender?
• We are currently traveling (and will be for the next 6 months) so we can't really go with a small local bank or credit union because we need to be able to do it all online, including closing.
• Another option for us would be to cash out some of our retirement savings. We are old enough to do that without penalties, but that may have some unwanted tax implications due to our current W-2 income.
• What's going to be the best way to analyze our options and make a decision, and if it IS to get a HELOC, are there any recommendations?

We have identified the area we want to invest in, and have found a local Realtor and Lender for the purchase, and are very busy learning how to analyze deals, but we figured we'd better get this figured out now so that we will be ready to go when we find the deal we want to pursue.

Thanks!