Heloc-just starting out!

2 Replies

Hey guys! New to Bp....but definitely just starting and learning as much as I can and following a lot of people...wanting to know if buying a property with your existing residential line of credit is too risky or should I continue to save up and pay cash. My ultimate goal would be for renting

@Matt Luzik hey. I don't believe it's too Ricky as long as you know what your exit strategy is and can afford the monthly payments for the HELOC.

I'm just completing my first flip and I used a combination of a HELOC and hard money to complete it.

Just as everyone preaches, if the numbers work, do the deal.

@Matt Luzik you may want to compare pricing on a cash out refinance vs a heloc.

Rates are really low now on 30 year mortgage- so you may be able to lower the rate on your existing mortgage, plus access your equity, and you have the option to use a fixed rate on a mortgage. HELOCS are adjustable rate, and they won’t do anything to change the rate on your existing loan.

Residential cash out refis can go up to 80% LTV conventional or 85% FHA, and most helocs above those LTV guidelines are more expensive since it's a riskier loan with secondary lien position.