Conventional Rehab Refinance Vs. HELOC

[Joshua Palos]

Hello everyone!

My name is Joshua and I've been a BiggerPockets member for a couple of months now. I am semi new to real estate investing. I currently own a house that was my primary residence but have been renting it out for almost a year now. The current property has a VA loan with a pretty great interest rate (2.375%). I would like to update the propriety but lack sufficient funds and do not want to tap into my savings. I have about 100,000+ of equity in the house. My question is should I refinance my current loan with a conventional rehab loan or use a HELOC? The pros of doing the refinance is that I would be able to restore my full entitlement for my VA loan. The cons are I would lose my great interest rate. If I go for the HELOC I would keep my interest rate for my VA loan but the HELOCs interest rate would be higher due to it being an investment property.

Thanks in advance for your insight!

[Ryan Miller]

Given the specifics of your situation, I recommend maintaining your current VA loan interest rate. It's a favorable rate, and given the equity you have in your property, you have a good foundation for securing additional funding without compromising this rate.

Considering your property is now an investment, and you're looking into financing options for updates, a VA loan could still be a viable path for you, even in your current situation. A knowledgeable VA lender can provide guidance tailored to your unique circumstances. Although HELOCs are generally more challenging for investment properties and might come with higher interest rates, it's not impossible to find one with effort.

I have a VA lending contact who is a retired Army veteran himself. He is very familiar with the intricacies of VA loans and working with veterans on various types of properties, including investment properties. He would likely be able to discuss your situation and explore all possible options, ensuring you make an informed decision that aligns with your financial goals and needs.

I can provide his contact information if you want. He would be more than willing to talk with you to discuss your situation and supply you with potential options. Let me know if you'd like me to pass along his details to you.