HELOC LTV's and Interest rates. Is there a best balance?

[Sean T.]

Hello all!

I am very new to the site; just found it through the youtube channel. I am currently trying to do the homework related to the possibility of using a HELOC to finance my first investment in real estate: possibly as the down payment for multifamily of some type. However one thing I am wrestling with at the moment is whether or not LTV is more important than the accompanying interest rates or visa versa. Is there an optimal balance for such things?

To possibly make such an assessment easier the hypothetical looks like the following:

The residence in question is roughly $400,000 in value and a primary residence.

Which would make more sense : 100% LTV offered with an APR at 8.74% (variable) or
                                                80 - 85% LTV offered with an APR at 4.0% (variable)

One of the harder things to decide is whether or not the ability to access that extra 20% in equity to potentially purchase a larger more lucrative property is offset by an interest rate that is most likely more than double at any given time.

If this topic has already been discussed elsewhere in detail and I simply missed it, I would greatly appreciate it someone could point me to the relevant thread, but if not any and all input is greatly appreciated!!!

Thank you!