HELOC for Rehab?

[Say Teoh]

I have been researching different finance options for my rehab projects. Hard money is my obvious last choice due to the high cost. I was thinking just borrowing from family members (maybe at 8 to 10%), no paper work and keeping the money in the family. :) HOWEVER, today Bank of America called me and offered me HELOC at 2.2% for the first year... my eyes just opened, why didn't I think of this? Now, question is.. any downside of using HELOC for rehab projects?

[Rhonda Blue]

I recommend using heloc for tons of investing and rehab projects but remember! Heloc is treated like a large credit account! If you carry a balance of more then 15%. It will have a negative effect on your credit score!
But if you can maintain a charge and payoff routine then your credit score will definitely benefit from that type of account!

If its just for carrying a balance and paying off slowly a home equity loan would make more financial sense for your credit score!

Good luck!