Want to Pull Cash Out of 100% Owned Property - HELOC or Mortgage?

[Steven Thoma]

Hi all, I recently purchased a SFR 100% cash to expedite the process. I’d now like to pull money back out to use for more investing. Which strategy would be better, a HELOC or a mortgage? My lender has offered the following: Mortgage - pull out 85% equity @ 4.9% over 25 years HELOC - 4.75% (equal to the prime). Per my discussion with him, interest is due monthly based on the balance of the loan, and the HELOC is renewed annually. I’m not sure I fully understand how the payments for the HELOC would be calculated. Any insight into this would be greatly appreciated. Thanks!

[Alexander Felice]

Originally posted by @Steven Thoma:

@Alexander Felice Thanks Alexander!  I think I agree with you, I'm leaning more toward the standard mortgage.  It's not so much the instant liquidity I want/need from this loan, it's the cash to put into more buy and hold properties.  This leads me to believe the mortgage is the better option.

 exactly.

confirm the terms before you lock either one down, but I've been in lending my whole career, these things are fairly standard.

if you take the heloc your payments will obliterate any chance of cash flow. mortgage is better suited for that