HELOC REFI or no?

2 Replies

Hey BP community.  

We are currently on our 2nd buy and hold property (thx to @Brandon Turner , @Joshua Dorkin for the podcasts I listen to daily and the motivation to take action).

We currently own a duplex purchased using a HELOC for the 20% down,closing costs ($20,200) and a private money lender for the remaining 60k @ 12%. I"m currently in the process of the BRRR method and looking to refinance shortly. 2 questions:

1.  How long do you have to wait before you can refinance with a bank? 1 year?

2. I have an option to switch my variable 2.24% interest HELOC rate to a FIXED rate of 3.44% (10 year) or 3.74% (15 yr). I currently only pay 100$/month to this and save the rest of the cash flow for vacancy, cap ex, etc.

**   I'm hoping the refinance has the equity to do a cash out refi but I'm looking to settle the variable rate currently in the meantime.....

Bill,

Judging from my conversations with lenders, there is no hard and fast rule for the "seasoning period" for refinance.  I heard an investor on one of the many podcasts I listen to (can't remember which one) said that he went from bank to bank until he found one that would refi shortly (either immediately or within a couple of months).  My lender requires six months.

If there's a window of time that is closing on the option to switch to fixed interest, I think I would switch it.  Otherwise ride the 2.24% as long as you can. My $.02

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