Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated 5 months ago on . Most recent reply

User Stats

3
Posts
0
Votes
Matthew Trevino
  • Rio Hondo Tx
0
Votes |
3
Posts

HELOC vs HELoan. Anyone have tips for using equity on a primary?

Matthew Trevino
  • Rio Hondo Tx
Posted

Hi there

I have primary residence that I would like to access its equity to begin my first RE investment. I have came across HELOCs and HELoans but not sure which would benefit me best?

I am leaning towards the BRRRR method or traditional LR once the right property comes across.

I have researched both but still not sure which of those 2 would benefit me best or if it even matters.

Just would like tips on this topic if anyone has any?

Thanks

Most Popular Reply

User Stats

3,740
Posts
2,584
Votes
Kerry Baird
  • Rental Property Investor
  • Melbourne, FL
2,584
Votes |
3,740
Posts
Kerry Baird
  • Rental Property Investor
  • Melbourne, FL
Replied

HELOC is best for short term money, because the interest rates are adjustable, while the second mortgage is a fixed rate for a period of time. I like them for an emergency fund, if I have over-runs with a renovation. I prefer this to using one for a down payment. Impossible to tell which would benefit you most.

I have found that lenders value the house in different ways; one is a full appraisal and the other is an automatic valuation…my credit union did a "drive by" valuation. Figure offers a quick HELOC, which we thought we'd get…but our DTI (debt to income) was too high. We also used PenFed for a HELOC, and that went well.

Tips: pull your own FICO score and call the local community banks and credit unions near you and ask what rates and terms they offer with a FICO like yours.  Make a table and compare, as interest rates and years of fixed vs variable rates will be all over the place.  Navy Federal has the longest draw and pay back period I have seen, whereas my local credit union has a very short draw/repayment period.  

Figure out what works best for your own situation.

Loading replies...