How to get a good interest for HELOC

2 Replies

Hi! BP community! I was wondering how to get a good interest on HELOC? I am debating if I apply now or wait for a few more months to get a better interest rate. I currently have 3.75 on my mortgage rate but If I would get a on HELOC on this Bank my APR would go up to 4.1 percent. Does your credit score make a difference when getting a good APR? Would this be worth buying another property for a higher APR rate on my house? My intent is to use this money purchase a rental property in Las Vegas( either buying a turn key home or even fixer upper). Thank you in advance for your help!

Do I understand you correctly? You currently have a mortgage with 3.75% interest on your own home and you want to set up a HELOC to take out a loan at 4.1% interest? You intend to use that money to make an out-of-state investment in rental property in Las Vegas? You must be a gambler!

I think it's a terrible idea! Encumbering the home that you live in is risky. Also, the terms of HELOCs can be different than the terms of mortgages, so if you proceed, make sure you know what you're getting into. Whether a bank would even agree to it, is another matter. To answer your question.... yes, of course your credit score impacts how much interest you will be paying. It also impacts whether you can even get a loan in the first place.

Marcia, Yes that is a correct statement 4.1 interest for HELOC. Thanks for the honest comment. Houses in Vegas is much cheaper than my area. In addition, rental income should be able to cover my loan. What do you suggest do I need to do to leverage my home equity?

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you