HELOC Loan Rates and Thoughts?

Question

Wife and I are looking into purchasing a fixer upper investment property in Florida.  Seller wants a cash offer.  I would like to make an offer using cash (By cash, I mean HELOC funds).  With about $30-$50K in renovations, it should still give me between $30- $50K in equity. We are looking to fix and rent, not flip and I'd do as much of the work as possible.

What are the current rates for HELOC loans?

Here are the details

I work in IT and my wife is a Dermatology NP. Combined we make approx. $400k Our DTI is below average.  We have approx (conservatively speaking) $300-400K in equity in our primary home that we'd use for the HELOC.

The only hang up is that we have not filed 2024 taxes yet (we always file an extension) but can provide W2s and 1099s to show 2024 proof of income.

Thoughts?

Amber Stout · Answer

Hi Bobbie, your local credit union or regional banks will usually offer the best terms and lowest closing costs for a HELOC on your personal home. I’d recommend reaching out to BayFirst to see if they’ll lend in your area. They’re typically very local, so they may not go out to Orlando, but that’s who I used and it was a great experience. Happy to share my contact there if you’d like.

Deborah Wodell · Answer

Sounds like you’re in a strong position with income and equity. HELOC can work well if you’re confident in your rehab costs and exit plan. Just make sure the rental cash flow comfortably covers the higher interest rate (especially if it lands 9–11%). Also worth comparing with DSCR or bridge loans—you might get more leverage without tapping primary home equity.

Kerry Baird · Answer

I have been looking at HomeBridge, Figure, SOFI and Navy Federal after looking at Nerdwallet and similar.  I liked the speed and process at HomeBridge so that is who we went with.

We also did not have our 2024 taxes filed, but that was fine.  I used credit cards to renovate a house and our DTI was high, so my rate was higher than yours will be.  The business credit card rates were 29%, oh yes indeed, but I need an an expensive emergency roof for a rental house in the recent floods.

The line I got at HomeBridge was 11% and now that my DTI is lower, they are offering a lower rate on an investment property.

Patrick Roberts · Answer

Helocs on primary homes with low LTV and good credit will be 7.5%-9.5%. For Helocs on investment properties, expect 11%+.

Kerry Baird · Answer

My thought is that $5000 is indeed a lot of money. It is also the cost of getting money quickly for an investment where I might not be able to do the deal otherwise.

Many HELOC providers will open a line of credit for free, but you agree to keep the line open for a certain amount of time.  It is similar to an origination fee for a mortgage.  The lender wants to earn money from your loan.

On the other hand, I just used HomeBridge and they were really fast and a high line of credit, also with a high fee.  If I'd used hard money, I would pay high interest and an origination fee.  I wouldn't be able to access that amount in a short period of time with a conventional lender, and it also would have an origination fee and closing costs, but would take 30-45 days (and they need the house to be in good condition and my DTI has to be good and my FICO scores have to be really high).

So with the HELOC I considered the juice worth the squeeze, and we got funds in 10 days.

Sophia Khawly · Answer

Is $5k in fees/closing costs on a $150k heloc a lot? We plan to use part of it to put a down payment on a rental property and then pay it off within a few months.

Camden Lowrance · Answer

Check out Alliant, they're running good promo rates and have no fees as long as you keep it open for the first year.

Reginald Truss · Answer

Hi Bobbie, you’re in a strong position to qualify—HELOC rates are typically 7.5–8.5% right now, and there may be other “cash‑offer” style investor products that could fit your fix‑and‑rent plan. Want me to send you a quick overview?

— Reginald Truss

HELOC Loan Rates and Thoughts?

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