All Forum Posts by: Stanley Dean

Is heloc on primary or 2nd home a recourse loan needing a personal guarantee

thanks for response how about heloc on primary or second home is that also a recourse loan need a personal guarantee

Hi all-  is commercial line of credit on rental property a recourse or non-recourse loan

Just following up if anyone was avaialable to provide any advise

Heloc versus Commercial Line of Credit in Maryland- Recourse or Non - Recourse loans

Hope all in the community are well and navigating safely during this moment in time.

I had questions as trying to free up some cash for situations to handle mortgage payment for rentals when tenants stop paying due to the situation/ possibly purchase below market homes

Is it wise to do a refi with cashout on my 2nd home with no loan balance versus getting a heloc in maryland

Also in Maryland is a heloc loan a Recourse or Non-recourse loan

How about getting a Commercial line of credit on Rental property is that a good wise decision versus doing a refi with cash out, since its hard to get a straight heloc on Rental properties.

Please advise, Thank you all stay safe.

HI BP community- while await on finding the right potential investment property for the right price. I am contemplating to using if this is good strategy. I am thinking of doing a refi 30years in an investment property and do a cash out and do a refi cash out on a Vacation property that was bought for cash and rehabbed and then apply a combined lumpsum payment to my primary home that I am paying a good amount in interest $1200 and there by increase equity and get a heloc open for use for the next coming investment. I am thinking this will save me a good amount of time and interest on my primary and have an open heloc available for pay for a potential investment rental. Please advise

Thank you George for great insight and pointers, heloc being at risk of not being permanent and getting closed at. I think it makes sense to just refi with cashout option to lock in today's rate than to risk keeping on a heloc onto next year and so and having the risk of the heloc funds frozen makes it not possible to invest any more especially when the market could take a dip.  Like to get further feedback from others as well

Thanks Marcello so the one discounted property you are buying through auction or other means, once acquired and rehabed and rented so you then have it placed on a Portfolio loan that are DSCR / asset value based on a 20/30 fixed rate ammortization, since you have maxed out on conventional loans since having a limit on loans one can get , IS the idea of you using the heloc to pay down primary a good idea? Do we run into the risk of having the heloc frozen on the primary/vacation homes on a down market when having negative equity, what are your thoughts on that.

 Hi Christine for heloc I approached m local community bank that as initial 1 year tier rate 19th 10 year draw, I only was able to find 1 bank that offered on my Vacation home- Sandy Spring Bank.  On my primary I got it through Third Federal bank that offered Prime rate -1% for the life of the loan.  Hope that helps.

Thank you Marcello great input was wondering what was the leverage means other investors were employing the heloc option versus cahs out refi , although heloc allows one to be your own bank ready with cash to strike when have found potential good rentals, but then we have to weigh in the possibility of rate hike which will be expected eventually with a draw period of 10 years and then have to pay P/I amortized payment with variable rate for next 20 years, so what is the typical play then after 10 years, does one payoff the balance as an investor and get a new heloc since some equity got built by more principal pay down and possible market appreciation or can one get a sizable amount from their heloc they have on a primary home that still draw period available and is interest only and payoff on the heloc on the VAcation home.   BTW the strategy to using the heloc to payoff the primary home faster is that a good working strategy.  The other risk of heloc is that is a recourse loan versus mortgage is non-recourse loan and the  situation of what happened in the 2008 fiesta were heloc were getting frozed by banks since house started to get negative equity, so can that situation come with heloc on Primary and Vacation homes.

I have been trying several community banks and no one seems to offer heloc on Investment rental property but they offer a Commercial Business line of credit secured by the rental investment property, how does that work?

Thank u Ashkey n David for response-  Ashley on a heloc loan there is no expense with closing and appraisal is free by the bank, but when used to buy for cash and refi will incur closing cost typically for range of home in 150-160k range adds to about 5000 in closing cost but have 1 closing cost to incur,but on a refi with cash out on a vacation home and then buy a for cash on a rental will incur 2 closing cost.  One value on the heloc is being able to use and draw when a property of the right price and rental potential comes and then make payment on heloc until the property is refied and cashed out to back the heloc, goal is to get atleast 20% below market comps minus repair so has some equity build so will lead me to keep atleast 5% into the loan after a investment purchase refi that requires atleast 25% down.