Updated 7 months ago on . Most recent reply
Using HELOC: for down payment or full purchase?
Hi all,
What is your feedback using a HELOC of a primary residence to purchase rental properties?
1. Use for a down payment
2. Purchase house outright
In both cases, the interest for the HELOC will be higher than the interest rate from a conventional or DSCR loan (at least in my case).
1. Use for a down payment
The rent needs to cover the HELOC payment and the loan payment
Do lenders allow this?
2. Purchase house outright
The rent needs to cover the HELOC payment
If the house is refinanced, then the rent would need to cover the new loan payment as well as HELOC payment for the remaining 20% equity
Thoughts, feedback, corrections, please?
Kind regards,
LarryC