Using Equity of Primary Residence to aid in finance

[Ryan Swain]

Thinking of using Equity of my home to get started in the real estate realm. Thoughts about this? What should I look out for and stay away from? I am wanting to get started and I am wondering really what are the other options?

I know about hard money, but I don’t know if I could refinance right away.

I guess I really don’t know which route to go? Does anyone have any recommendations or resources I could look into and research? I’m super stoked to get going on this!

[Andrew Postell]

@Ryan Swain I love HELOCs. They are amazing products and can give you access to quick money at a super low cost. Two of the common areas of concern for HELOCs I see out there is the 10 year maturity date and the adjustable rate. Since HELOCs have adjustable rates they will often catch people off guard when they adjust. With rates not going much lower than what they are currently, it is likely that your rate will increase in the future. The 10 year maturity date is where the HELOC will modify into a different product all together. Meaning after opening the HELOC for 10 years it will cease to be a HELOC. It will "mature" into a 20 year fixed rate mortgage that you can no longer draw on. And when is matures the rate will increase. I've seen typical numbers of 1%-2% higher than your current rate.

So as long as you have a plan to use it and PAY IT BACK...that's usually the winning formula when using HELOC money. Use it, pay it back, use it again, etc. Hope that makes sense.