HELOC for Investment Property

[Brittney Wright]

Hi, All!

I just applied for a HELOC with my credit union that is offering a 5 year draw, 15 year repayment at a 5.49% fixed rate. 4.99% fixed rate for a 10 year repayment. I went ahead with the 15 year repayment. This is my first investment property and first time using a HELOC. I would like to know how others have used a HELOC for just a down payment on an investment property. Is it best to refinance the investment property soon after purchasing to quickly pay back the HELOC? Obviously 30 yr investment mortgage rates are much higher than the HELOC but I am not sure I should keep 3 loan payments (primary residence, HELOC and investment property). Or do people use the full 15 years to pay down the HELOC and keep 3 monthly loan payments? Paying on a HELOC means I am paying interest on my equity which somewhat does not seem smart. Just looking for what has worked for others. Thanks

[Taylor Dasch]

I would pay the HELOC back and then use it again and repeat until the draw period is over. This way you will have less stress when doing your rehabs as you will be able to pay for everything from the HELOC.