I consider myself a quick learner which I attribute to a valuable lesson my dad taught me when he took my new bicycle back to SEARS the day after he bought it for my birthday. When I asked “why” he simply replied; “You didn’t thank me, so I took it back.”
From that day forward, I was always the first of my siblings to say, “Dad, thanks for taking us to Dairy Queen, dropping us at the movie theater, taking us to football practice, and thanks for not getting angry when we were teaching our youngest brother how to drown in the bathtub.” He survived by the way.
With that said, I need myself some learnin regarding this HELOC thing. I own a SFH rental outright and read about using a HELOC to help fund the downpayment on another SFH instead of using my own cash in the bank. But why would anyone take out a HELOC to fund their down payment? Am I missing something here? Doesn't that mean I'd need to service two loans?
Ok, I’m ready, but please go easy on me. I’m still smarting from the trauma of losing my bicycle 40 years ago. Oh, and you may need to use simple math in your example. Thanks!
Yes, you would have two loans, but you wouldn't have any of your own money invested. Then you could refinance and pay back the HELOC and only have one loan at that point. Hope that helps.