HELOC or Mortgage to get cash out of primary residence

[Laura LaFrenier]

I am just starting out and I have two options for getting cash out of my primary residence in order two invest - HELOC or mortgage. I have a current equity line of $50k on the house with no other mortgage. The house was appraised at $165k. I want to get hour $50 more, which would give me either a $100k mortgage or HELOC. The current payment is $200/mo for the HELOC of $50k so I am assuming the payment would be around $400 for $100k. The mortgage (30 year) would be a payment of around $490/month. I am looking to purchase a small rental property with the $50k and then re-finance the rental to re-invest in another property. What should I do? HELOC or mortgage?

[Mark Kao]

Heloc’s advantage is the min draw payment, but a 30 yr will give you a lower fixed month plus better deductions, at least while it’s still available