Buying a primary residence with a HELOC
Hi,
I'm new to buying a rental. I own my primary residence outright and would like take a out a HELOC on it and buy another property with the intention that the new property would eventually become my primary residence (might need to fix it up first). I would like to keep my house now and rent it out. I see a lot of people get a HELOC to buy rentals but that keeps the HELOC under their primary. I have talked to lenders and can't seem to get a straight answer to if this is ok.
The problem is that eventually the HELOC would be attached to an investment property (my current primary residence). I just want to make sure this isn't going to be a problem. If so what do I do about it?
I want to get a HELOC because it allows me to make cash offers, buy property at auction etc. I would get one with a fix rate lock option in case prime heads up.
Thanks for your advice!
Most Popular Reply
I have a rental property that used to be my primary residence and I had HELOC with that house even after I bought a new house, which is my current primary residence. I had no problem with HELOC with my rental property. Only the issue I had is that I could not refinance HELOC with a better rate or to increase the max draw amount. But I could cash-out refinance and use more equity than the original HELOC could take out. So I think it is a good idea to buy a property with your HELOC, and fix it up, then you do cash-out refi or get HELOC with your new property. And you can keep doing this and make $$$ leveraging your equity.