Updated about 7 years ago on . Most recent reply
Using Home Equity Loan or 30 Year fixed loan?
Hello BP! I got an offer accepted today for a rental property with a price of 138k. I have my primary residence paid off worth 220k. Should I use a 30 year traditional loan at rate of 4.875% and 4000 closing cost OR home equity loan with rate of 4.75% and 550 closing cost? Am I able to deduct the home equity loan interest for 2018 federal tax return? What is the best financing option here, should I even leverage my fully paid primary residence?
Thank you!!
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
If it's worth more than $138k, I'd use a Heloc. You can refi later without putting 20% down.
If you're buying at full value it doesn't matter much. I'd just put a new fixed rate mortgage on it if I had the down payment in an acct for 2 months. You have that, right?