Put down 20% or buy in full...what's better?

[Rick Thompson]

Hello,

I'm a Rookie home investor and will soon buy my TK property in the next month somewhere in the midwest. I have everything set up with my HELOC, but my question is....would it be better to put down 20% on my first property and then get a conventional loan for the remaining balance OR if I have enough money in my HELOC, should I buy the TK property outright? My HELOC int. rate is about 5.5%. My thought is if I buy it outright and I get a renter, wouldn't I just refi. from a bank and get all my money back for my HELOC. Correct?

Any thoughts and suggestions would be great.  Awesome site with lots of great info.

Thanks!  

[Ned Carey]

You won't necessarily get all your money back. Lenders have seasoniing rules and often restrict how much you can get back on a refinance until a certain amount of time passes. Usually 6 months or a year. 

If it takes ALL of your Heloc line to pay in full I would not do that. you want some backup for emergencies.