Help on HELOC: 5-yr draw, Principal+Int Payments

[Danny Gunawan]

Has anyone acquire a HELOC, where the payments during the draw period were principal plus interest?

Where I am worried about is having a high minimum monthly payment after I, lets say, purchase a $100,000 SFH all cash.

Let me give some more data:

Draw period = 5 years; where at the end I can either re-apply to extend the credit, or enter repayment period of 15 years

Interest (as of today) = 5.75%

Min monthly charge factor = 1.0748% of unpaid balance

So with the example of $100,000 SFH purchase, at month #1 my payment would be $1,074.80. Does this seem right? Would this HELOC strategy become unviable, or is it still ok to use for financing an investment property? Or would one combine it with a conventional loan?

[Jason Powell]

that's a cruddy HELOC. get a different one if possible. All mine have 15 year draw, and the ability at any time to convert any portion to fixed interest 15 year amortization (can even do this at the 14th year and buy yourself another 15 years).

All mine are interest only too, and 5.25% or less.

I'd check US Bank and Key Bank for starters. That's where I have a couple.