HELOC Downpayment Question!

[Tim Kaminski]

BP,

Have a Owner Occupied Duplex that I have been renting out and fixing up for the past 8 months. Wanting to pull out equity with a HELOC and look for another 2-4 Unit use that money on a down payment.

Question:  Say I pull 20K to use on a down payment.  Will that full 20k balance be due the following month like a credit card?  If I just pay the minimum payments, wouldn't I be subject to ridiculous charges/fees?  Am I off on this?

Do people put up with this until they are able to refinance and pay off the HELOC in full?

Thanks,

Tim

[Ed Emmons]

It is a line of credit meaning you pay interest only on the balance. Usually you will have a 10 year term. So after 10 yrs if there is still a balance it would be rolled into a loan.