Equity loan vs down payment.

3 Replies

Hi all, I am trying to figure out on what is the best way to invest my savings. On one side: i can invest this in the down payment for the rental property. On the other: make a big dent in my primary mortgage and take an equity loan. Is there a better way? is one way is better then another? Better tax ?

Thank you 

I like the strategy of "using other people's money". That equity in your home is just sitting there doing nothing for you. Might as well put it to work. Keep Your savings as a savings for a rainy day. You would basically be buying a home with zero down. Back in October I took out a home equity loan and over the past 9 months I've managed to buy 6 cash flow buy and hold properties using the loan for down payments on mortgages. You will need an investor friendly lender to pull all this off. Shawn Huss at Talmer Bank and Trust is who I use. Good Luck!

Paying down your primary and then turning around and borrowing the equity is needlessly complicated.  Just use your funds for down payment on a rental.  If you want to accelerate paying down your mortgage, use some of your cash flow to do that.

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