HELOC for duplex( no mortgage)

[Rosa Jones]

Any advice on getting a HELOC for a 2 family flat in Milwaukee? It's a rental , but its my residence as well . I'm aware its probably considered a " investment property " but I'm still Looking for good interest rates, as there's no mortgage on it. Any suggestions?

Thanks!

[Marcus Auerbach]

Most lenders will give you between 70% and 90% of what the property is worth. I like working with local lenders, but US bank has decent heloc programs.

A heloc has usually a draw period and a payback period. It's almost like a credit card that becomes a mortgage. During the years of the draw period it is just a line of credit you can use and pay off as you see fit. Often this is 5 or 10 years.

If you are not planning on using the money only occasionally, you are better offer with a cash-out refinance. You get a 30 year fixed rate mortgage, usually better rates than a heloc, and just get a check for 75% of the value of the property.

A lot of people will have a primary mortgage and then a heloc on their equity. For example if you own a 200k duplex and you have paid down your mortage to 100k, you have 50% equity. The heloc will go up to a certain amount of combined loan to value - LTV, let's say 75%, so you get another 50k on a line.