First Time Advice Pls!
Im closing on a 4bd, 1 1/2 bth house the middle of next month. Its in great shape and vertually ready to move in. It was appraised at 69k+ and the bank was asking 55k for it. I picked it up for 47k. I have the cash to pay for the home outrite but have been swayed by others to take out a HELOC. Puting 10% down <> and having any equity available to me. It was even suggested to me that i could uppon recieving my first payment to go ahead and pay off the remaining balance giving me 100% equity (available instantly)with no penalty. I intend to keep and rent this home long term. Should i make the payments or pay it off? half? Intrest on the HELOC is 6.5% variable. Should i be thinking something else??
This is the first house i intend on keeping and im looking into rehabbing future homes with intent to flip/rent. If ive not given enough info i appologize but feel free to ask me. Many thanks to replies.
G
This deal has nothing to do with my personal residance, which i own free and clear. My accountant has suggested i pay half of the home off and finance the rest. When i approached him after talking to a loan officer (who recommended the HElOC) , he thought doing the heloc was a great idea and maybe an avenue for keeping my cash somewhat liquid. This is the first Rental property for my portfolio. With more to come hopefully and maybe rehabbing and flipping in the future. The loan i would be taking out for the rental house would have the HELOC in it.
This is all very new to me and somewhat overwhelmed with it all but im trying to learn... IM 35 yrs old and and have a credit score of around 681TU. So whatever i do id like it to help me in that world also.
G
[ Edited by gsantee on Date 10/24/2005 ][ Edited by gsantee on Date 10/24/2005 ]
Another option would be to pay off the house when purchasing and then take out the HELOC later. That way you will have a line of credit to do things when you need to do them and you are only paying for the money when you need it. You could also put the 50% or 40% or 30% or 20%, etc. down but make sure the numbers work on your end. Example: Are you looking for cash flow?, etc. Good luck
Just so I am clear.
Are banks/lenders giving you HELOCs on your investment property? All that I have talked to will only give a HELOC on my primary residence.
Wachovia will give a blanket HELOC on three of your investment properties at 80 LTV.
Yes on investment property!