HELOC vs Cash out refinance

[Joshua Gregory]

I have a good amount of equity in my home and just got approved to take out 85% of it with a HELOC at 5.99%.

The goal is to start buying properties with this cash but I realized if I were to leverage a loan with my HELOC I would have two loans on the remodel and down payment part of each loan.

Would it just be better to do a cash out refinance for my equity instead of using a HELOC so I'm not loosing 6% on every house I buy until I can refinance out of that loan?

[Jim D.]

If you do a cash-out refinance and pull that equity out, then you'll be paying interest on it all the time because you've permanently pulled it out (until the loan is fully paid off).

If you do a HELOC, you'll only be paying interest on it while you're using it.