HELOC or Conventional Financing?

[Tim C.]

Hi BP,

I am looking to get my feet with an SF investment property this year and have a few questions about getting financing from the bank.

Question 1. I own my primary residence free and clear and it is worth $75,000. Would it be smarter for me to go to the bank and get approved for a HELOC or get pre-approved for conventional financing? With the HELOC I could probably leverage 100% of my rental purchase however I'm not sure how interest rates and terms compare between the two.

Question 2. Should I try to get pre-approved ahead of time or wait until I have a deal that I can present? It seems silly to wait until I find a deal, however I have heard that banks would rather see examples instead of hear plans.

Question 3. Are there any other pointers you can give me for when I call and visit the bank? Questions to ask, documents to bring, etc. I'm brand new!

Thanks for your help!

Tim Chasteen