Save? Or Pay down mortgage aggressively to later use a heloc for investing?
I own my house with about 30% equity. And currently 5k in savings. My goal is to get my first rental property this year.
My thought is if I pay down my mortgage principal instead of simply saving it aside I will automatically save the 2.875% of interest while adding equity to my home. Then I will use the equity to take out a heloc and begin to invest.
Or should I simply save everything I can and have the cash sitting in the bank??
What are your thoughts and advice for someone like me who is just brain storming and getting started?
Thank you for your input
You could just go and take out the HELOC now, use part of the HELOC to make a lump sum payment on the 1st. Ask the 1st to recast your mortgage to go along with your lump sum payment. This will lower your 1st mortgage payment, or instead, it will lower the time frame to pay off the loan, you get to choose. Then be aggressive in paying the HELOC back down, so you can have the full amount to use for down payments + closing costs on new rental purchases. That way you are potentially ready to invest in properties today, versus waiting.
Just one thought of how to get this done.
Thank you I really appreciate it. I’m just trying to expand my knowledge in this category and look at my options.