HELOC on VA Loan - Options ?

[Alan Hicks]

My primary house is on a VA loan.

Appraised at $270k (Balance is $216k).

I had it appraised last year for permit/tax reasons when I finished the basement and added 1100 sq ft.

I have 2 options:

1. Use existing appraisal and HELOC can go to 89.99% of LTV which will net me around $26k. Rate is Prime +1.25 (6.75%)

2. Pay for another appraisal, and HELOC can go to 95.5% of LTV which will net me around $40k, but rate is prime + 2.5% (8%)

Thoughts?

This will be the down payment on a 2nd rental property.

Correct - borrowing money to borrow more money..

Income is $117k, have $1500 extra each month (which has been paying down 1st rental property).

If I borrow the $26k, that is 1 year bonus. So very little risk.