All-Cash then HELOC vs Conventional Financing.

[Manuel Savorelli]

Hey board, been absent for a while. Hope everyone is well. I've been presented with this opportunity to buy a house either $79900 conventionally financed, or $75k all cash. My initial discussion with my realtor was that I didn't think it would be a good idea to tie up all that cash when rates are low, and can lock in for 30 years. I thought I made a valid argument. Her rebuttal was that why not pay all cash, get the discount, then take a HELOC on the house for up to 80% LTV, for 1% cheaper than conventional loan. Never considered that option because I don't think it's wise to have 100% equity. Also, I believe HELOC's have variable rates. Besides these two reasons, can anyone think of anything else, either pro all-cash or con. TIA, Manuel

[Harjeet Bhatti]

HELOC is not offered by bank up to 80%LTV. You are right its variable rates but you can fixed also for certain time. Why to pay double closing cost if you want to use that money for buy and hold the properties . If you want to use this money for shorter term HELOC could be good option for you.