Fort Worth, TX · Member since 2018 · 117 posts · 16 votes
Just finished listening to new BP rookie podcast and the heloc strategy caught my attention. I currently qualify for an FHA loan for around 225k. It was not mentioned to my lender that the title for my parents home is under my name, mortgage free. I didn't pay for it, just passed down to me. My family currently still lives there. It's an older home that needs renovation but it seems like a have a goldmine and I didn't even know it? Can acquiring a heloc Help me with my FHA loan or are helocs more used when flipping/ brrrr strategy?
I would like to get more information on helocs and how they work. What book/podcast do you guys recommend that gives a detailed explanation on helocs and how to use them.
By definition a HELOC is basically a line of credit that is tied to the equity in your home. HELOCs work similar to credit cards but they are secured by your property. The bank gives you a limit based on your equity and you can draw on the money as needed. I would check with your local lenders to get information around terms, rates, LTC criteria, etc.
The other option would be to take a loan out on the paid off property and use the lump sum of cash how you see fit.
I'm not really sure what you mean by using a HELOC to help with your FHA mortgage. Would you use the money towards the Downpayment? If this is the case, I would recommend you ensure there is enough cash flow to cover both loans.