Advice on getting HELOC

[Armand P.]

Hello,

I own a primary residence for about 10 years and have a good amount of equity. My mom who is part owner currently lives in it. My girlfriend and our two kids are renting a 2 bedroom condo and are interested in buying a SFR. I have consulted with a family realtor and his advice is not to sell the property. My initial thought was to find a 1 bedroom apartment for my mom to rent and rent out the primary (rent in the area go for $4000-$5000K). However, being that the Fed's cut interest rates yesterday and likely cut two more times this year I feel like a HELOC could be a good option here. Based on my mortgage lender and i could qualify for a variable rate around 4% with interest only payment.

Here is the break-down:

Currently Mortgage: $2000K Per Month

HELOC: If I were to borrow $300-$400K would be around $1200-$1500 Interest Only (I would pay down the principle each month as well)

The primary residence is located in the bay area (peninsula) and the new home would be: Pleasanton, Livermore, Morgan Hill, Lathrop San Jose. Let's say I have a HELOC of $400K that would only give me enough for a down payment which means that I would need to take out a 3rd loan.

I know this is kind long just thought I'd get some idea or feedback if either one of these plans would work.

Thank you!

AP