Financing Rehab with a Balance Transfer (Credit Card) DFW

[Eric Chappell]

So, there are obviously a swarm of different lending companies out there, all of which seem to have varying points, terms, and interest rates.  As I have been exploring private lending, hard money, and conventional loans there are advantages and disadvantages to each, but it wasn't until I was opening my mail today that I had a different idea.  While I'm sure this isn't a new idea, a balance transfer deal on a credit card I don't currently use often had a low "transfer fee."

I'm thinking the single transfer fee and full access to the funds without an escrow make less work for me.

Has anyone run into any issues with using a balance transfer for helping to finance a rehab?

Basically the terms are 2% transfer fee (equivalent to points I suppose) and 0% APR for 18 months and I just make minimum payments. This sounds like a world better than paying 2-5 points plus interest using any of the other methods. The limit is only the credit limit I suppose and the elevated APR if its not paid off (but 18 months is substantially longer than hard money), but I'm curious if anyone has run into problems or if this is a good strategy for a low cost mini-loan.

[Waylon Themer]

It's a good strategy if you are very disciplined in managing the card(s).   Not only are you avoiding the interest of a Hard Money loan, you are also avoiding other closing costs such as admin fees, etc. If it looks like you might run out of promo time, you need to look at replacing the debt with other card(s) in a timely manner.  As Nghi stated, you can completely hurt your cause if you miss the deadline.  If you are buying the house with a traditional mortgage and using the credit card as rehab only, be sure to wait and do the balance transfer after you close so you don't screw up your first lien underwriting.  Good Luck!