Evaluating my option with HELOC's

[Paul Dario Jr]

Hey BP. I'm evaluating my HELOC options. I've applied with two banks/credit unions. Here are the details:

Bank #1: approved for $98,600 @ 6.15% for 360 months. Rate is variable monthly. I don't believe an initial draw is required.
Bank #2: pre-approved for $135,000.00 at a variable interest rate of 6.00%. This rate is based on Prime plus a margin of 2.00%. (Rate will never go below 3.25%). The rep said the rate would be 6.25% if I don't take an initial draw on the HELOC. They also said if I borrow at an LTV of 75% instead of 90% I could get a lower rate, 5.25%, but the line max limit would only be $60,000.

I'd like to purchase my first investment property. I don't have a property lined up yet, but I wanted to secure the HELOC so I'm ready to go when I find something to offer on. Probably out of state.

My question is whether or not I take the higher interest rate HELOC so that I can have the higher line of $135k to give me more buying power later on when I find a property.

I'm new to this and would love some input. Thanks!