Los Angeles, CA · Member since 2020 · 17 posts · 7 votes
So I currently have three rentals, 2 houses and a condo. I want to convert the garage in each home to an ADU. I can do about 60 percent of the work myself. Since I can still do conventional I will be refinancing the condo (worth 240k, owe 140k) for a lower rate from 5% to 3 something. In terms of getting funds in order to do the ADU conversions. Is it a smarter idea to do a cash out refinance on the condo, or do a HELOC on one of the houses I have about 200k in equity in? I will be refinancing the condo either way in order to lower the payments and get a lower interest rate.
Lender · Nationwide Lender · Member since 2019 · 391 posts · 140 votes
5y
@Eli Yachini
If you plan to lower the rate either way in the condo I would think that the Cashout option is going to better suit your needs. That will depend however on how much cash out you want.
The rates will differ on a rate/term vs a cash out. You’ll want to compare the two to see to find out if it’s worth it for the amount of cash vs interest savings.
A Heloc would most likely be available as well after doing a max LTV Cashout if you wanted more.
If you are interested in comparing the options feel free to reach out to me.