Refinancing vs heloc for HML payoff

5 Replies

Hi I have a question about a HML that I obtained for a sIngle famIly investment, should I use a refinance to payoff loan or is it possible to get a heloc to payoff ,the loan from HML is for 75k ,property appraised at 196k .
Originally posted by @Darrell Smith :
Hi I have a question about a HML that I obtained for a sIngle famIly investment, should I use a refinance to payoff loan or is it possible to get a heloc to payoff ,the loan from HML is for 75k ,property appraised at 196k .

 HELCO will have higher interest rate compared to normal investment loan that you can get. 

You will actually end up with some cash. See simple cal calculaton below:

Cash received when refi = 196k* 80% LTV = 157k

Cash after HML payoff= 157k-75 = 82k

Cash after refi fees= 82-2k= 80k. 

You will end up with 80k that you can repeat the same process again. 

Good luck :) 

Thank you everyone for the advice, I will  be closing next week with Quicken refi at 5.25% rate payment on a 75K loan plus all closing cost included 85k payment is 741$ including tax, insurance, principle and interest  no money out. Property is rented out at 1650$ net 909$.