Home equity Loan/Line

[Carrie Eaton]

Hello! I lived in my 2 br 1ba single family home for 5 yrs. I want to rent it out and buy a duplex. I took the first step by calling a local bank that I use for my business account. I asked about a home equity loan or line of credit to possibly use for new investment/home. I was told you can only take out a home equity loan/Line of credit if you plan on living in the property. Am I understanding correctly? Should I not mention what it's for if I decide to try at another lender? I have about 70k in equity, and thought this would be a great way to start in REI. Any suggestions would be greatly appreciated 😊

[Andrew Postell]

@Carrie Eaton this is a common area of confusion. A HELOC is treated differently than a LOC. I know it sounds like I'm splitting hairs but some banks write HELOCs in their residential department....which won't write Investment Properties. And that residential department will often not speak to the commercial department. So they'll just say "sorry, we don't do it"....not even knowing that they really do!

HELOCs are for your primary home.

LOC's are for investment properties.

So just make sure you are asking about HELOCs on your primary home.  And go to some different lenders.  That might get you in front of some better candidates for this type of loan.

Thanks!