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Updated over 6 years ago, 07/01/2018

User Stats

5
Posts
1
Votes
Laura LaFrenier
  • Investor
  • Jackson, MI
1
Votes |
5
Posts

HELOC or Mortgage to get cash out of primary residence

Laura LaFrenier
  • Investor
  • Jackson, MI
Posted

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?

User Stats

29
Posts
5
Votes
Amir Khan
  • Rental Property Investor
  • Detroit, MI
5
Votes |
29
Posts
Amir Khan
  • Rental Property Investor
  • Detroit, MI
Replied

Thanks Laura I'm at same spot :) let's hope for good advice here.

User Stats

55
Posts
10
Votes
Mark Kao
  • Restaurants
  • Bellevue, Wa
10
Votes |
55
Posts
Mark Kao
  • Restaurants
  • Bellevue, Wa
Replied

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

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User Stats

29
Posts
5
Votes
Amir Khan
  • Rental Property Investor
  • Detroit, MI
5
Votes |
29
Posts
Amir Khan
  • Rental Property Investor
  • Detroit, MI
Replied

How's Jackson MI for rental properties ? Is it worth it to invest there.

User Stats

4,353
Posts
1,722
Votes
Sam Shueh
  • Real Estate Agent
  • Cupertino, CA
1,722
Votes |
4,353
Posts
Sam Shueh
  • Real Estate Agent
  • Cupertino, CA
Replied

Without disclosing interest rates and total payment it looks muddy. How about go to Michigan Avenue talk to a mortgage officer? HELOC or REFIN. Do not assume the payment since interest rates (arm vs fixed) fluctuates. I will start with your current bank since they have your past payment history. Credit Union may be OK.

Sam Shueh