Home equity loan or Line of credit

[Arthur L. Timmins Jr.]

I have a question about getting started buying my first investment property...right now I own my primary residence and it will be free and clear in approximately 2 1/2 years...I've been reading books on how you can use a home equity loan or a HELOC to secure a down payment for a investment rental property...I would like to know which one would you guys recommend doing for that purpose and if I should wait until my primary residence is free and clear before doing so? I haven't got a property picked out yet I'm still scouting neighborhoods looking for potential properties and practicing running the numbers on them, but I would like you guys input on that so when I do decide to buy my first rental I'll have an idea of which option to use as far as HEL or HELOC...

[Michael Barbari]

@Arthur L. Timmins Jr.

Always remember that heloc rates follow prime and is not fixed which is currently at 3.25. 10 years ago when I started banking it was 8.25. Feds are already talking about raising rates and that will directly reflect mortgage and heloc rates. Lock in when you can. You will have 4% money for the next 30 years. By the way, helocs have been taking 4-6 weeks for the last 10 years and 3 different banks I have been with.