Updated about 8 years ago on . Most recent reply
Heloc for Rental Rewire
I have a triplex that has old knob and tube wiring in it and I would like to replace it sooner than later. I have never taken out a HELOC on my primary residence before, but am thinking of financing the rewire with one. I believe that the cash flow from the rental property will pay off the wire job in about 1.5 years.
It is my understanding that there is a draw period and a repayment period for HELOCS. The draw period has interest only payments to be made and the repayment period has a variable rate. Numbers aside, can I generally prepay HELOCS back in full during the draw period? I know each bank and lending terms are different, but I am just looking for a rule of thumb.
A cash out refinance on the rental property is not in my best interest because of my low interest rate. Any thoughts? Thanks!