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Updated almost 5 years ago on . Most recent reply

User Stats

121
Posts
13
Votes
Pixel Rogue
  • PA
13
Votes |
121
Posts

HELOC @ 2.45%, Investment a4.25%. Use HELOC to pay off Investme

Pixel Rogue
  • PA
Posted

HELOC is 2.49%, where our investment property is at 4.25%. We could use the HELOC to pay off the investment property.
Once paid off, we could then move the property into an LLC (albeit requires paying transfer taxes.)
There is no mortgage on primary home btw.


Down the road we could, as well, then get a mortgage back on the property w/a lower interest rate than 4.25% (and for a lower amount by that time) and pay back the HELOC.

Would the savings from 1.75% be worth the play? 
Worth noting that we would continue making the same payments, with the benefit of more of the payment getting applied to principal. 

PROS
- HELOC is at 2.49%, where the investment loan is at 4.25%

CONS
- ties up resources (if something else comes along)
- possibility of tax implications (harder to claim interest as expense) - actually tax write off will likely vanish completely.
- more income from investment property would get added to our annual income base each year.
- in today's climate LLC loans are harder to access (albeit this may be one-three years out)

----
Update ~ hit a wrong key and this post saved. No way it seems to correct the title. 

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