Most HELOC are adjustable rate. I believe most (I do not really know the stats, but fixed rate is an common option) refinances are fixed rate.
We use HELOC for shorter debt such as to purchase a property that we plan to value add and refinance in the near future. Or to purchase all cash and then refi. If we are using the loan for something of unknown or long duration, we use cash out refi.
It is nice to have a fixed rate loan that will not increase for the duration of the loan. This is especially true with interest rates hovering near all-time lows. There is little room for interest rates to go down, but a lot of room for interest rates to go up.
Home equity line of credit - No payment required until you use the funds. They can be paid back as well, so if use to acquire a foreclosed property and sell for profit or turn into a rental and refinance the property, the line of credit can be paid back to 0, hence no payment until you use the funds again.
Cash out refinance - You pay on these funds via mortgage payment every month.
Most HELOC are adjustable rate. I believe most (I do not really know the stats, but fixed rate is an common option) refinances are fixed rate.
We use HELOC for shorter debt such as to purchase a property that we plan to value add and refinance in the near future. Or to purchase all cash and then refi. If we are using the loan for something of unknown or long duration, we use cash out refi.
It is nice to have a fixed rate loan that will not increase for the duration of the loan. This is especially true with interest rates hovering near all-time lows. There is little room for interest rates to go down, but a lot of room for interest rates to go up.
Depends on your realistic goal. If you do decide to take out a HELOC, and for whatever reason cant pay it off within a couple years, you can always look to refinance that same property to lock in a 30 year fixed rate.
Once you go beyond 10 years your HELOC will turn to a principle and interest payment (with an adjustable rate, OUCH).
If you plan to pay it off quickly, avoid closing costs, and sit on some cash without paying the interest up front, then this isn't a bad idea. But If you don't plan on paying it off quickly, and already know what you are going to purchase, then look for a cash out refi.