Investing in second property with HELOC

[Sarkis Gezalyan]

Hello all , 

Newbie here trying to understand how many mortgages I will be stuck with. Let's say I have a million dollar home, with 500k equity in it. I would like to pull this out with a HELOC and put it as my down payment for a second home for a buy and hold strategy. If this HELOC matures in 10 years, will I be stuck paying three mortgages? One for my first house, one for the HELOC converting into a regular mortgage, and one for the second investment property?

[Bob Okenwa]

@Sarkis Gezalyan

The HELOC is subordinate to the original mortgage, so you will be paying the original mortgage, the HELOC, and the investment property. You will pay the HELOC only if funds are drawn, akin to a credit card. As soon as funds are drawn and the statement cuts with a balance showing, you will be responsible for the minimum payment at that time.