HELOC Terms and Interest Rates

[Elliot Mitchell]

Hey Everyone! I'm in the process of applying for my first HELOC and have a couple questions: I've called about 10 banks and compared the terms and this info is the best out of all of them:

Variable interest rate @ prime + 2.84% = 9.84% as of today

10 year draw/30 year payback

Ability to unlock and re-lock a lower rate if and when prime decreases (this will cost $200 to do)

Interest only payments

No initial draw required

Appraisal and closing costs paid for by the bank

No max interest rate, it's just based on prime plus margin

My thoughts: 10% interest isnt great, but its better to get in the game than stand on the sidelines. If the deal is good enough and it cash flows, it doesn't matter. Also, if BRRRR-ing a property, I'm only going to be paying interest for however long it takes to rehab and refinance (maybe 6 months).

What are your thoughts? Am I thinking about this wrong? What do you think about these terms? Fixed rates are more comforting but seems like most HELOCs are variable. Any insight would be greatly appreciated!

Thanks!