Heloc Versus Conventional loan refi with cashout on Vacation home

[Stanley Dean]

Hello all- Would like a feedback response from the BP community I am contemplating between getting Heloc Versus Conventional loan for a Refi with cashout on Vacation home/ 2nd home. This home was bought for cash and gutted and totally rehabed and I am trying to find the best way to leverage my equity for growth in terms of buying property for cash to get some level of discount/ renovate/ refi using the brrrr strategy, so my funds will be for the short term interim period whereby I can refi and reuse the funds for the next potential purchase. What would be the best way about doing it to get the best leverage as I can get a heloc with fixed rate for 1 term and then goes prime+ on 10 year draw and them amortized for 20 years or get a Refi cashout on a 3.75 30 year loan , other thing is that heloc option allows me to pull upto 85% LTV and a Refi cashout will allow me to pull only 75% LTV, also with these heloc or the Traditional mortgage on my second home where its been over 1 year will the lender offer loan based on the purchase prive or the appraisal value/Comps as One lender stated they go with the lower amount of the purchase versus appraisal

[Ashley Kehr]

Hi Stanley, this is a great dilemma to have! Do you know what price point you want to buy your next BRRRR at? If you do run your numbers using both scenarios. If you purchase a house for $150k using the heloc how much interest, closing costs and refinance fees would you occur? If you purchase a house for $150K using cash out refi how much interest, closing costs, and refinance fee would you pay? You can run your numbers over the next 5 - 10 years too. This will give you an idea of how much you are paying upfront for this financing and what it would look like down the road.