Refi or HELOC?
I'm refinancing my primary residence soon to pull out some equity for reasons that are irrelevant. I also plan to purchase my first buy and hold property later this year and I will probably need to use the additional equity in the primary residence to make the down payment on the investment property. I hope to buy a SFR or Duplex and probably use a conventional 30 yr fixed mortgage with 20% down. The price range for this type of investment property in my target market is $100k - $175k. I'm weighing 2 options:
1) Take maximum equity out of my primary residence in order through the refinance to secure the cash for the down payment on the investment property (and potentially a second investment property next year)
2) Leave some equity in the primary to keep the payment lower, but then use a HELOC later to finance the down payment on the investment property
Some details:
Value of the Primary Residence: $320k
Current Mortgage Balance on Primary: $155k
Equity coming out regardless: $50k
I'm looking for feedback on what folks see as the advantages of the HELOC vs. having a higher balance on the first mortgage. Thanks in advance.