Fix rate for home equity loan

5 Replies

Hi BP! I've accidentally got into RE by renting out my first house a few years ago. Seems like a great opportunity to get to financial freedom. When it comes to accumulating funds for down payment etc. Save cash. borrow against 401K (restrictions based on the provider). Hard Money. re-fi (closing cost $). Home Equity -  I don't particularly like the variable interest rate swings. Is anyone aware of a fix rate Home Equity Loan on the real estate property used as a collateral? Any other sources? Any help is appreciated! Max  


Your best bet for a fixed rate in this market would be to do a cash out refinance.  It's a good choice for someone looking to get a fixed rate with a lower payment.  You also end up with only one mortgage rather than a mortgage 2nd lien and multiple trade lines on credit which is not always a good thing.  Do you have equity in your home where you could do a conventional loan up to 80%?

So I actually just took a HELOC out on my property that has two products in one. You are allowed to take funds out of your HELOC and then lock in at the current rate for a fixed term loan (I think up to 15 years). Mine is through a local credit union. I would look into your local credit union's products.

@Caroline Moore , thank you for the info. Could you please explain how does the process work. Looks like you have traditional and HELOC loans on the property. And with HELOC, you have an option to get the cash out at a fix rate?

yes!  Exactly.  I have a conventional loan and then took out a heloc as well based on existing equity in the home.  When you pull funds out of the heloc, you have the ability to lock in at a fixed rate.  Essentially it is a traditional heloc with the ability to turn your withdrawal into a home equity loan (another product that might be beneficial for you to look into if you can't find the 2 in 1 product!)  I am relatively new to all this so I also can't speak to @jason wray's comments about impact on credit/cash out refinance.   

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