Advice on Loans

[Will Demps]

Hello,

My brother and I received a house from our father (act of donation in june 2008), the house is a two family unit, estimated value of $70,000. The house is clear of any mortgages, liens (no money is owed for it).

We plan to rent out both sides of the property, but we need money to finish the renovations (central ac/heat, carpet).

We need roughly $12,000 to finish the house and make it available to renters.

My questions are :

What would be the best loan to try for Equity loan , HELOC, or a Personal Loan?

Since I need roughly $12,000 should we try for more ($30k and put the rest in the bank or get a HELOC and use what we need?

Thanks for any help

[Eddie Ziv]

If you think you can get HELOC, get as much as you can qualify for. You only pay interest on the amount you borrow, rather than on the amount available to you, and the interest this days is low (My HELOC is 2.75%). Another option is to get a Home Equity loan and if you think you can qualify, you can later refinance that loan and get a conventional fixed one. Be aware though, that H.E. Loan has a high rate (about 8.5% these days) but it is easier to refinance than HELOC. Also, HELOC have restrictions with regard to refinancing from the last time you drew money from the account. There must be a "cooling period"
Regarding personal loan, that is really depends on the rate, terms and fees.