What is the best way to pull out equity?

Question

Hello, I wanted to know what would be the best way to pull out equity from my home to reinvest that into a rental property. I have a 3.30% interest rate on my current home. I know that the interest rates are a lot higher if I refinance. Heard of several options like HELOC. Any advise is appreciated, thank you!

Caleb Brown · Answer

Yes but be careful. I'd have money set aside for the property once it's bought. Try to only use HELOC to pay "cash" or as a down payment

Caleb Brown · Answer

HELOC is by far the most popular. Rate will probably be in the 9's. Just run #'s and pay back the HELOC when you use it

V.G Jason · Answer

Save money and invest it.

Eliott Elias · Answer

HELOC is your best bet if you want to keep your interest rate.

Dennis Muno · Answer

Hello Salvador,

HELOCs are usually the popular way to go. They allow you to pull out equity from your home to go do projects that will be cashflowing. For HELOCs on investment properties lender allow the HELOC amount + current mortgage(combined loan to value) to be a total of 70-75% of the home value. 80% combined loan to value when doing HELOCs is not common but there may be a few lenders that may do it. Usually a FICO 660 and above improves your chances of finding a good HELOC

Once you get the HELOC you are able to draw out of the HELOC and do projects. Usually, interest rates on money taken out of HELOCs are usually variable, while money not taken out of the HELOC usually does not have a variable rate.

Salvador Olivares · Answer

Can I use the money in the HELOC to pay the mortgage on the new property during vacancy periods?

What is the best way to pull out equity?

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