Restrictions on HELOCs

[Mark Clarke]

Can I use a HELOC on my primary residence to complete the purchase of another home which will be my primary residence, paying off the HELOC when the first place sells? Do the rules on this vary according to state?

[Kyle Kelley]

@Mark Clarke That should be ok to do. Just make sure to check with your bank or lender that holds the HELOC to be sure there are not any extra costs associated with closing the line of credit early or within a certain time frame of opening the HELOC.

I am currently using a HELOC on my primary residence to purchase investment properties and plan to sell my primary residence within 5 years, but was told I have to keep the line open (I can pay the balance down to zero, but can not "close" the line) for at least 3 years in order to avoid an early termination fee.

So it should be alright to do, just check with your lender to verify there are not any additional costs to do so, or if you think those costs will be justified (like say only a couple hundred dollars) then you could still close the line early, but just beware it may cost a little extra.