Financing Advice - HELOC or Life Insurance Policy

[Matthew Schellberg]

Hi All,

I am looking for second property (house hack) and wanted advice on financing options.  

I have ~$160k in equity for my out of state property with a great interest rate of (2.8%). I have ~$20k in cash to dedicate to this deal. I also have access to a life insurance policy where I can borrow ~$30k at 5% interest. The types of properties I am looking for will need some rehab but mostly comestic (painting, flooring, etc.). I was leaning toward the life insurance policy for additional financing, but didn't know much about HELOC (questions below). Any advice would be greatly appreciated.

(1) - Does the HELOC have to be with a bank in the area near the property?

(2) - What are good questions to asks lenders when talking about HELOCs?

(3) - Downsides of a HELOC?

(4) - Would HELOC be worth it in my situation? Thinking I would need $20-30k additional to cover down payment/closing/rehab.

Thanks!