Updated almost 7 years ago on . Most recent reply
To HELOC or not to HELOC
Hey BPers-
I am beginning to search for my first deal which will be a flip. Before I go full steam ahead, I need to line up my financing.
I have been researching and talking to my mortgage broker about obtaining a HELOC on my primary residence. The catch there is that I currently have a second mortgage of about 40k with about a 5% fixed interest rate that would have to be paid off in order to use the HELOC for anything else. With interest rates rising, I am worried about having a balance on the HELOC and possibly not being able to pay it off quickly. On the plus side, I have enough equity to pay off the second and still have about 75K to use for a flip.
I have also been considering refinancing out of the first and second loan since between the two loans I am currently at 70% LTV, however my first loan has a great interest rate of 3.25% and I do not want to lose that.
Any thoughts?