Updated over 4 years ago on . Most recent reply
Paying HML cost with a Heloc.
Today I set forth a huge decision. Placed an offer on a house in Baytown tx.
145k. repair cost coming in at 50k and arv right around 265.
I have a Heloc that has 90k available 4.25% 10 year.
My plan is to use a HML to buy the property and pay for repairs. I will be using around 35k for downpayment and closing cost from the heloc. The HmL I choose to work with has zero points if I put down 15% then it's 1.3% monthly. His loan will be right at 160k so Monthly interest will be 2133. Contractor estimates 5 weeks but I'll say 2 months of HML holding. Which again will be paid for by the Heloc. At this point if you're still with me, my heloc balance will be right at 40k , but since it's interest only the monthly payment will only be 142 monthly.
I will then do a cash out refinance for 75% of the 265 which puts my mortgage at 198.75k let’s call it 200k. This should in theory pay off hml and get my heloc balance pretty close to zero.
If you’re still with me, thank you. Please guide me if there’s some type of error in my strategy. Very much appreciated, after 3 years lurking on bigger pockets. I made some big moves today.