HELOC or Re Finance

[Charlton Zang Jr]

I am getting ready to buy my first property and I am taking money out of my primary house. My banker is telling me to refinance to save the interest and a smaller payment rather than using a HELOC at a higher rate. Should I use the HELOC and in 6 months get a mortgage on the investment property or just refinance? I have a 20 year loan with about 18 years remaining at 2.8%. Any help would be greatly appreciated.

[Devin Peterson]

I like the flexibility of a HELOC if you can stomach the variable rate adjustments. You also can put back and take out as much as you'd like at any given time. As opposed to a straight-up cash out - you get rid of the rate at 2.8 and you have to pay the entire new lump sum. Also depends if you have any active deals lined up or not.