Using line of credit to fund rehab
We have an unsecured Personal Line of Credit for about 3 years now and have not used it. We're currently under contract for a property in a promising area which we're paying cash for and not looking to dump anymore liquid assets into funding the rehab.
We're not sure just yet on keeping this as a rental (cash flow) vs flipping. Different discussion and number crunching there.
One of the options would be to use the LOC but not entirely sure how it works. Let's say we use $20K from it, how would we determine the following -
- With the rate being variable, how can we determine the current rate?
- Is there a term associated with paying back the $20K?
- How accurate is the Bankrate calculator?
- What would be other alternatives to funding the distressed property?