Should I pay off my investment Condo with HELOC

[Aleksandra U.]

Hello,

I just secured 50k HELOC with 3 first years fixed rate of 3.49%.

My plan was to pay off an investment condo with mortgage balance of 44k. It is Adjustable rate loan, recently 4.75% till 2023. After that rate goes up.

Haven’t done any appraisal on the condo but look like it might be worth around 75k now.

After it's paid off, I was going to get a HELOC on the condo, I found the bank who was willing to give me HELOC on investment but only when they are in a first position.

I’m wondering if that plan make sense.

My thoughts were if I pay off the condo loan, that property will be free and clear, one less mortgage to worry about and the interest rate is lower. I will obviously have a debt against my primary residence but the idea was to pay it off as quick as possible.

Secondly with HELOC, money is not tied up, when pay it down, I can still use it.

And lastly - I can get a new HELOC Against that condo and have it as a down payment for another investment. Just a side note- investment HELOC doesn't have promotional rate but that's not a big deal because it's write off anyway.

What are your thoughts?

Thank you!