Cash Out Refi or Refi with a HELOC?

3 Replies

Thanks in advance for any advice on this, I'm trying to figure out the best avenue to pursue. 

These are approx but close numbers, just trying to get an idea.
ARV $225

Current appraised value $200

Principal on 1st Mort is $98

Current Heloc payoff is $48

So when I refi, I assume I'll only be eligible for about $175 (75% of current value) I obviously want to payoff the current Mort and HELOC, so with the equity I have left (about $25K) should I just try to get cash out or establish a new HELOC? Will one option offer more benefits than another?

The Money I get out will be used to do some work in the already finished basement to convert it to a basement apartment. Needs a kitchen added plus some flooring, paint and basic rehab to make it rent-able. 
Certainly I need to talk to local lenders but I'm in a forced holding pattern at the moment so just trying to think ahead on what would be more beneficial. 


Thanks @Harjeet Bhatti

That's the kind of expertise I was looking for. 

The only logic of the Heloc I was thinking was that I'd still have access to it as it was paid down for future improvements or usage towards another property. My goal would be to pay it down as quick as possible, dumping most of my cashflow back into it.