Heloc on Investment Property

[Dany Kao]

Hi,

I would like to take out a Heloc on my rental property. Does anyone know a bank or credit who does that? 

Thanks,

Dany

[Stacy Raskin]

Fixed 2nd mortgages are a good option as well to get cash out of an investment property. HELOC rates have been going up like credit card rates due to the Federal Reserve board raising rates. It's also harder to find investment property HELOCs and terms have worsened for borrowers because of incidents like Silicon Valley Bank and Signature Bank failing which makes the market nervous. This in turn, causes lenders to tighten up their lending criteria and eliminate products they consider more likely to default. Lenders like to be the first mortgage on a property. They see anything else as much more risky as they figure they won't get paid back as a second lien on the property if there's a foreclosure.

Fixed 2nd mortgages are a fixed 30 year fully amortzied term (or shorter term) that can be refinanced in the future when rates are lower. The benefit is that the rate and payment are fixed, you get to keep your low first mortgage rate and you also get cash out of your property for the next deal.