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Varun M.
  • Investor
  • SF Bay Area
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Pulling out equity from primary residence

Varun M.
  • Investor
  • SF Bay Area
Posted Sep 9 2021, 09:59

Hi BP friends,

Following some great advice on this thread: https://www.biggerpockets.com/... we are looking into refinancing options to pull equity out of our primary home in SF, and use it to build our investment portfolio. That said, I have a few questions: 

(1) We're exploring both HEL vs. HELOC. I think I understand the basic differences, but any thoughts from someone who has been there done that for your primary home, on what you chose and why?

(2) Using the equity, we would ideally want to stagger buying our investments properties over 6 - 18 months (vs. all at once) At the same time, take advantage of the low interest rates in today's market. My understanding is HELOC provides the flexibility to use the line of credit on an as needed basis, but has variable interest rates. HEL, on the other hand, has fixed rates but requires us to pull out all or nothing (no flexibility in draw schedule). So trying to explore if there's a way we can get best of both worlds (flexibility of using line of credit and low / fixed interest rates).

(3) are there other considerations we should keep in mind as we go down the path of taking a HELOC / HEL loan on our primary residence? We understand the risk of putting our house down as collateral and the implications of doing so. Anything else we're missing from a future credit worthiness perspective, eligibility for future loans, etc.?

(4) any recommendations on whether we should approach corporate banks vs. credit unions? Or just go with whoever is able to offer the most suitable rates / loan terms?

(5) and finally, do you all have recommendations for loan agents / officers who can help us think through what would be the optimal path for us given our situation?

Thank you for your help!

Varun



San Francisco, California

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