First time, HELOC for capital?

[George Baal]

Purchased a home during the pandemic, value has gone up roughly 2.5(estimating), believe i have enough value in a HELOC to get a down payment on a second home.. is it a wise decision to add that to my plate then rent the first house for mortgage payment+? OR should i avoid the HELOC all together and look for capital else where..?

[Sarah Brown]

HELOCs can be a great option! They give you access to cash that you don't have to pay for until you draw it. The downside of the HELOC is the interest rate is usually higher so you will want to pay it off faster. Be sure when you are mathing out your next purchase, you include the cost of the HELOC. Don't calculate just the payment. It will be all interest. Calculate enough you can apply soome toward the principle also.