HELOC or Cashout Refi?

[Shannon Vistisen]

I'm looking to purchase my first property this year. I was leaning towards a cashout refi due to the locked in interest rate. But am now wondering if a HELOC would be the better option. How much ch does the interest rate move when working with helocs? And would the smarter route be a cash out knowing that interest rates are going to go up in the near forture.

property: will be a SFH as a short term rental.

[Todd Mason]

@Shannon Vistisen both are great depending on how you use them like has been mentioned.

For example if you were going to do a fix and flip a HELOC would be a great option cause you'd use the money fast and when you sold the property you'd be able to pay off the HELOC and rinse and repeat.

If your using the money for a down payment for a STR and wanting to live off / use the cash flow the cash out IMO would be the better option. Because it's a fixed rate amortized over a period of time. Where as like was said before your payment for your HELOC is interest only so the small payment can be deceiving. In that case you would probably want to use all your cash flow proceeds to pay off the HELOC asap.

Hopefully that makes some sense