Rental Property Investor · Woodstock, GA · Member since 2019 · 13 posts · 2 votes
I was first stuck on getting HELOC on my primary residence to use as a downpayment for an investment property (long or short term rental)
I talked to a few lenders and have gotten an option to refinance out of my FHA loan and get a HELOC with the equity. Is this a horrible idea? Should I stick to my FHA & avoid additional fees?
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
6y
@Amber Golson ok, thanks for that. I would 100% recommend refinancing out of a FHA loan into a Fannie/Freddie loan. Now, this is of course if it makes sense to do so but there is a small chance that it may not.
For example, if your credit is terrible and the Fannie/Freddie loan rate is so high that it makes your payment higher than your FHA loan, then it would not make sense to refinance....but I think that would be highly unlikely.
Now, something that caught my eye...if your loan balance is $159,000....then there's no way that your new loan balance will be $159,000. Unless the bank wants you to bring money to closing. And I would 100% recommend AGAINST that. Roll the closing costs into your new refinanced loan. Then get that HELOC and you should be good to go! Thanks!