All Forum Posts by: Ashley Anderson

Typically a HELOC and HEL are second mortgages and they can be a good way to access capital to invest, but the problem with using them is the interest rate is typically even higher than the debt you can get on the new purchase, so they might not be a great idea unless you plan to aggressively pay them down when you use them.

Why don't you buy a new primary residence using a 5% down payment conventional loan and turn your current house into a rental? If you don't have the 5% down payment then you can do a HELOC on your current house to do it, but it will at least be easier to pay back compared to a 20% down payment on an investment property. If you buy a house that's a little nicer than you are in currently then it could make moving a lot easier.

Multi-family is tough right now because a lot of new supply has come online, so rents have been soft. Rental rates and vacancy rates on single family have been a lot more stable.

@Josh Young Was hoping to stay in the current home a bit longer, could I still get it with 5% down? Preferably would want to stay where I am and purchase a new primary in 3 ish years.

Definitely open to single family if the multi family didn’t work out.

1 Vote

Phoenix, Arizona

Good Morning!

I see a lot of conversation about HELOCs and HELs - but not a whole lot about a second mortgage as a option to get started.

About me: owner of a primary residence, looking to get a multifamily (preferred but open to single family) property soon. Going to use equity from home to purchase next property.

Has anyone used a second mortgage? Pros and Cons?

2 Votes

Phoenix, Arizona

Quote from @Stering Hall:

Good morning Ashley,

It depends on what you plan on using the HELOC for. I'm guessing you're trying to use it to purchase your next property or fund a flip? I also would continue to shop around and see if anyone can beat that rate.

-Sterling

Thank you! Yes, it would be to purchase my first investment property.

0 Votes

Phoenix, Arizona

I am looking to pull equity out of my primary for my first deal (which will be out of state LTR back in my hometown in IL) and my Loan Officer brought back these numbers. I know that interest rates are high, however looking for opinions on these numbers. Thoughts on if this is a good deal and if not, what should I be looking for? Credit score is about 760. 25 year term with a 5 year draw period.

Option 1 using max line of credit:

At the max loan to value of 89.99% the interest rate increases to 11.5% This is prime of 8.5% + 3%.

Line of credit amount: $140,000
Estimated interest only payment: $1,245.83
Estimated full qualifying payment: $1,489.04

Option 2

Dropping the loan to value to 80% to decrease the rate to 10.5%. This is prime rate of 8.5% +2%.

Line of credit amount: $100,000
Estimated interest only payment: $875
Estimated full qualifying payment: $1,067.26

Thoughts?

0 Votes

Phoenix, Arizona

All Forum Posts by: Ashley Anderson

Ashley Anderson has started 2 posts and replied 5 times.

Post: Looking to Connect with Investors in AZ/New England Area

Post: Second Mortgage versus HELOC

Post: Second Mortgage versus HELOC

Post: HELOC Rates - good deal or find another option?

Post: HELOC Rates - good deal or find another option?