Home Loan Vs. HELOC?

2 Replies

Hello,

I've found a deal I'm interested in and am planning to finance it using the equity in my primary residence (currently, I have no mortgage on it so this would be the only loan against it). I thought a HELOC would be better than a home loan because it is "reusable" but the variable interest rates make me nervous given the current rate environment. My question is, is it worth taking on the risk of variable interest rates to have to flexibility of a HELOC (i. E. As soon as I refinance this first property, the full amount of the HELOC will be available to use again and will not hold up future deals) or is the loan with the fixed rate better, despite the fact that I have to reapply every time I want a new one, given we are currently in a "rising" interest rate environment?

Heloc all day. Hyper inflation mitigation steps are on the governments watch list. Interest rates will be controlled and steady for the next few years. Will there be increase? Yes, but anything drastic is still a few years out. 

I have multiple HELOCs. I love the flexibility and understand the interest rate risk. I can use them over and over again like a credit card basically. I never consider a Loan over a LOC.

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.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.