Updated about 8 years ago on . Most recent reply
Using home equity loan for downpayment on investment property
Hi - I'm new to the site, and wanted to jump right in by posing a question for the community...
I would like to acquire a property, but am short $20-30K for the downpayment. That said, I have $300K+ equity in my primary residence. Is it possible to (and/or advisable to) draw a home equity loan against my primary to bridge the shortfall for the downpayment and help me acquire the property? Any alternatives or red flags I should be thinking about?
Any thoughts or suggestions on this would be much appreciated!
Most Popular Reply
The one suggestion I would make: Don't tell the bank giving you the HELOC that you want to use it to acquire more property. Some banks aren't fans of that, so just tell them "property improvements" as the general reason.
When I got mine, the mortgage broker taking my application just said "I will pretend I didn't hear that" when I told her I wanted to use it to buy more real estate.