Buying house with Home equity loan???

[Erik Fredriksen]

 Is it better to buy an investment house using  money from home equity or with your own money for a down payment?   It looks to me the intrust rate is the same so I would just have 2 loan instead of 1 loan.

[Benjamin Aaker]

Hi Erik,
I understood your question to be whether to use money from a line of credit vs cash. What do you plan to do with that cash if not to purchase your new investment? Using cash carries no interest rate so certainly would be better then the line of credit. If you've been here long enough, you'll know I'm very big on lines of credit. They are cheap, as @Kerry Baird says. They are low cost to maintain. They are ready with the money when you need it. Much like cash. Once you withdraw the money, unlike cash, you have to pay it back with interest. If you have that in cash sitting around, then pay cash. Get the HELOC set up, though, so it is ready when you find that next smokin' deal.