HELOC Payment Explanation

[Hilary Braun]

Hello everyone!

I'm beginning to scale my rental portfolio and using funds from a HELOC to cover cash to close on my properties. I was using HELOC payment calculators online to gauge the cost of the cash to close per property, but after nearing close on my HELOC, I've learned that I was close to a hundred short on my calculations. The payment for my HELOC was explained to me as:

So the payments on the amount you withdraw at the beginning will be based on a calculation of the interest on the loan + 1/360th of the balance every month.

So your interest would be your balance times the APR and then divide that by 12 to get your monthly interest. You also take your current balance and times that by 1/360th to get your principal. Add those together to get your payment.

I'm having trouble understanding this explanation - can anyone with knowledge in this area jump in to clarify?

Thanks!!