I'm new to BP and just recently started my REI journey. I'm trying to be creative with my financing and will most probably tap into my home equity in the near future, but I am unsure if my thinking is possible.
If I co-own my primary residence ($250k) with my sister (mortgage with bank#1; $150k in equity), can I obtain 2 separate HELOCs (@$50k each, instead of 1 HELOC@100k) if both are with bank#2? (separation of HELOCs for administrative purposes between my and my sister)
[numbers used are examples only]
I've tried looking online, but all scenarios lead to it being with 3 different banks (with one having less claim over the property). I was thinking if it was with the same bank, technically, the bank shouldn't have any problem since 2nd and 3rd claim are within the same bank?
Has anyone gone through this? Any comments/feedback would be appreciated!
Yes, you can get a 2nd and a 3rd with the same lender... if the lender is willing. The 3rd should be at a higher rate.
It’s possible, but You’ll need to find a bank willing to take a weak 3rd position though and you’ll be sure to pay for that via higher rate. You’ll also pay for 2 appraisals and then sets of fees. What’s your logic behind 2 helocs?
Thank you for your responses! I just thought having two separate HELOCs would be the easiest way to resolve conflicts between my sister and I.
Maybe look for a smaller bank with more flexibility. You won't be able to pull a total of 100k out though, nobody's going to take 2nd or 3rd position up to 100% LTV, maybe up to 175k or 200K total debt, (70% or 80% of LTV AT 250k value) I would think.