HELoC advise, is this good?

[Kurt Traynor]

I was just approved for $235k on my primary home and I have no personal debt. Terms are 9.5% fixed 10 year, Interst only with 20 year ARM. Fess about $8k. Is this worth it? I want to have the funds available to deploy when I find a deal. Thoughts?

[Patrick Roberts]

The fees are high, and the rate might be a little high. Most HELOCs are WSJ Prime + a spread, and prime is at 8% right now. If you dont have great credit, 9.5% is probably about right. Also, Helocs are typically variable rate, so I would check on this detail. Usually, there is a draw period at the beginning where you pay interest only, and then the line converts to an amortizing loan for the remainder of the term. 

Overall, I'd say this is a fairly normal deal. This is definitely a nice tool to have if you want to use it to buy a new property in all cash, but keep in mind that you'll need some type of takeout loan after the purchase to payoff the Heloc. This would not be suitable for long term financing.