I would go HELOC. Your fixed rate is good, the HELOC is a ARM so it will start low, little to no closing cost. Just like you said, you only pay interest on what you use. HELOC are flexable, you can purchase property and pay all profits back into the line to keep interest payments down and it is a tax deduction. If you need to draw money out you are free to do that for repairs or more property. After the 5 year draw period if you have purchased 3 or 4 properties you can HELOC one of the rentals and pay off the one on your home. I have 2 HELOC and I put my rental income in them right now, they are at 4.5% and if I put the money in savings I get taxed. After the draw period, just pull equity out of another property and pay them off. good luck
jeff
A little advice, please. I am looking to ‘pull’ some money out of my home to use for RE investment. My mortgage balance is 154k. My home should appraise at about 210k. Would I be better to go with a HELOC or refinance the loan. Current int. rate is 5.7%
I am leaning toward the HELOC, in case I do not need all of the funds at once.
Thanks.
Re: Refinance or Home Equity? - Posted by Brandy Larson
Posted by Brandy Larson on June 07, 2004 at 14:26:30:
HELOC. If your rate is on a 30 year fix. Usually you can get a HELOC with no closing cost. It would be cheaper to go with the HELOC versus a refi, since 30 yr fix rates are at 6.00% Good Luck Brandy Larson 434-242-9626
HELOC!
Unless your current 5.7% rate is for an ARM with very little time left before the adjustment period starts.
If that is the case them you might consider refinancing with another ARM for 3-5 years fixed. With that you can beat 5.7% but I would not give up that rate if it is a 30 year fixed…