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Zachary Blomberg
  • Phoenix, AZ
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Question about HELOCs

Zachary Blomberg
  • Phoenix, AZ
Posted Aug 8 2022, 15:23

Hello! I am interested in opening a HELOC to tap into the equity of my house without changing my current interest rate on my mortgage. I have been shopping lenders for a few days and they offer varying numbers for max allowable credit and interest rate. I can't decide which is more important between the two. For example (these are hypothetical), one lender will give me a credit line of $100,000 at a 6.5% interest rate, but another lender will give me $150,000 at an 8% interest rate. I don't have a particular investment in mind yet, but just want to get the credit line open. What do you think? Thanks!

Phoenix, Arizona

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Steve Vaughan
  • Rental Property Investor
  • East Wenatchee, WA
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Steve Vaughan
  • Rental Property Investor
  • East Wenatchee, WA
Replied Aug 8 2022, 15:43
Quote from @Zachary Blomberg:

Hello! I am interested in opening a HELOC to tap into the equity of my house without changing my current interest rate on my mortgage. I have been shopping lenders for a few days and they offer varying numbers for max allowable credit and interest rate. I can't decide which is more important between the two. For example (these are hypothetical), one lender will give me a credit line of $100,000 at a 6.5% interest rate, but another lender will give me $150,000 at an 8% interest rate. I don't have a particular investment in mind yet, but just want to get the credit line open. What do you think? Thanks!


For BRRR I'd take the $150. Access to the capital is often more important than a couple % on the rate.

Chances are though, the higher rate loan also has higher closing costs and maintenance fees. 

Tell us about origination costs (like full appraisal vs desktop) and maintenance fees for each. 

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Zachary Blomberg
  • Phoenix, AZ
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Zachary Blomberg
  • Phoenix, AZ
Replied Aug 8 2022, 15:46
Quote from @Steve Vaughan:
Quote from @Zachary Blomberg:

Hello! I am interested in opening a HELOC to tap into the equity of my house without changing my current interest rate on my mortgage. I have been shopping lenders for a few days and they offer varying numbers for max allowable credit and interest rate. I can't decide which is more important between the two. For example (these are hypothetical), one lender will give me a credit line of $100,000 at a 6.5% interest rate, but another lender will give me $150,000 at an 8% interest rate. I don't have a particular investment in mind yet, but just want to get the credit line open. What do you think? Thanks!


For BRRR I'd take the $150. Access to the capital is often more important than a couple % on the rate.

Chances are though, the higher rate loan also has higher closing costs and maintenance fees. 

Tell us about origination costs (like full appraisal vs desktop) and maintenance fees for each. 

Ok good to know. Each option has no closing costs as long as I don’t close the line within 3 years. No appraisal fee either. They each have an annual fee that is insignificant ($50 vs $75 annually).

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Jim Pellerin#2 Multi-Family and Apartment Investing Contributor
  • Real Estate Coach
  • USA
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Jim Pellerin#2 Multi-Family and Apartment Investing Contributor
  • Real Estate Coach
  • USA
Replied Aug 8 2022, 16:25

Access to money is more important than the cost of money. But it depends on the impact to the cashflow of your deal.