Strategies to pay back loan from family member

[Conor Shea]

Hi all, I am looking for advice on the best way to pay a family member back. I recently bought a triplex in San Diego for $890,000 with 0% down at a 30 year fixed 2.25% VA loan and it appraised for $965,000 at the time of the sale. I have used $65,000 of a family member's money to cover the rehab. Currently, I will make interest-only payments until the principal amount is paid off through a refinance within three years. However, with such a low interest rate would it make more sense to take out a HELOC to pay off the principal amount? Or are there other options that I should be looking into? I would like to refinance to use the VA loan again as I may be moving soon and would like to buy property wherever I go. Seeking advice on the best way to proceed with getting the principal back. Thanks!

[David Pere]

@Conor Shea You most likely won't be able to take out a HELOC since you're currently hovering around 92% LTV. I would suggest that if you want to pay them off quickly you should push your BAH toward them since you're saving on living costs.

As for buying when you move, you could also save your BAH to use as the downpayment on either an FHA or low down payment conventional purchase.

You could probably do a VA cash-out refi on the San Diego property to pay them out and have cash for a downpayment at the next home too, but I'll defer to @Jon Lallande to give you a better idea on the best strategy for you to use in this situation. 

Where are you headed for your next duty station?