Can i use HELOC to buy a fixer and then convert to 30 year loan?

[Lenny B.]

Hello everyone,

I am thinking of using a HELOC on my primary residence to buy a duplex in Sacramento. The property is a fixer and a probate sale, so has too be a cash with no contingency offer, hence the need to use HELOC. However, I am not planning on flipping the property, I want to buy, remodel and hold it to rent out.
My question is whether it's possible to convert the balance on the HELOC to a mortgage on the fixed duplex, instead of adding the balance to my primary residence.

thanks.

lenny

[Joe Splitrock]

@Lenny B. yes this is a common strategy. Buy a property using a HELOC then refinance into a lower fixed rate loan. Talk with your mortgage broker about what you are planning to do, but it shouldn't be an issue. The only issue could be if the HELOC balance prevents you from getting the new loan. That is why it is good to talk with your banker up front about it.