HELOC vs Home Equity loan

[Charles Perkins]

I'm working on a short plat and will be building another house on the new lot. I'm in the process now of looking at financing options for the build. I prefer a HELOC to a loan. I'm interested in your thoughts.

[Dustin Tucker]

Hello Charles, are you building a house for yourself or to sell?

I would do a HELOC, because if you don't want to take the money out you don't have to pay the interest, on a home equity Loan, the full amount is going to be advanced when the loan funds, and you will pay finance charges on the whole amount.

We do investment loans on new construction, Typically we can do 60% of the land costs, and up to 100% of the vertical construction, not to exceed 85% of the Costs.

Thanks,

Dustin

[Charles Perkins]

We will be selling it and funding other investments.

[Charles Perkins]

Quote from @Dustin Tucker:

Hello Charles, are you building a house for yourself or to sell?

I would do a HELOC, because if you don't want to take the money out you don't have to pay the interest, on a home equity Loan, the full amount is going to be advanced when the loan funds, and you will pay finance charges on the whole amount.

We do investment loans on new construction, Typically we can do 60% of the land costs, and up to 100% of the vertical construction, not to exceed 85% of the Costs.

Thanks,

Dustin

The property is free and clear.  The short plat costs will be paid out of cash flows. It is a buy and hold investment property recently remodeled.

current land approx $250K

current home $250K - 300K

[Dustin Tucker]

Quote from @Charles Perkins:

Quote from @Dustin Tucker:

Hello Charles, are you building a house for yourself or to sell?

I would do a HELOC, because if you don't want to take the money out you don't have to pay the interest, on a home equity Loan, the full amount is going to be advanced when the loan funds, and you will pay finance charges on the whole amount.

We do investment loans on new construction, Typically we can do 60% of the land costs, and up to 100% of the vertical construction, not to exceed 85% of the Costs.

Thanks,

Dustin

The property is free and clear.  The short plat costs will be paid out of cash flows. It is a buy and hold investment property recently remodeled.

current land approx $250K

current home $250K - 300K

Depending on your rental rate, you might want to look at the DSCR rental loans, the advantage to getting a loan vs. selling, is 1 you don't pay taxes on the loan amount, 2. your property continues to cash flow, and appreciate. Also, we don construction loans, we can fund 60% of the land cost and 100% of the vertical construction, let me know if you are interested.