Updated over 9 years ago on . Most recent reply
What are the pros and cons of a HELOC vs Home Equity Loan?
One of my rentals has considerable equity built up. I've heard of people using their equity to fund rehabs and acquisitions. I only know these basics:
The Home Equity line of credit is a revolving account, like a credit card, with a variable interest rate. You only pay on what you actually use.
The Home Equity loan is like a 2nd mortgage. You pay on the full amount whether you spend it or not, but the interest rate is fixed.
Other than that I know pretty much nothing. What are the pros/cons of each? Which is easier/faster to get? Which is cheaper/more expensive in lender fees? Which do most investors use? Is one better for acquisitions (larger purchases > 100k) and the other better for rehab costs (smaller ~ 30k)?