Please Read...Need Your Advice !
I have a 40,000 HELOC with prime interest rate (now 5.25) Here is my question .....If I decide to purchase a rental property for ....lets just say....35000.00, would you suggest that I use the HELOC for the entire purchase or just use the HELOC solely for my downpayments on a conventional loan. An investor friend of mine advised that I did NOT want to use up my total HELOC but keep that basically for downpayments on deals. I need advise from the TCI family. thank you...... btw...my fico score is 710
thank you.... so would you suggest that I go with one of the commercial banks? (bank of america, etc.) ALSO, would a bank be more favorable in giving you a loan on a piece of property that they KNOW will be rental property? just curious. Also, how do you feel about those other lenders out there such as The Money Tree (i think thats the name) and some other HIGHLY advertised lending institutions....for some reason they scare me.
My partners and I have stellar success dealing with local banks, where you can sit over coffee with a decision maker.
Like all business, relationships are key.
Yuu have a pretty good fico if you use the whole 30k from the Heloc your credit score will go down a few points due to the fact they see that as using the whole revolving credit line. Use some of the money as a down payment and get convention financing for the balance.
One cautionary note on the Heloc. Mr. Greenspan will continue to raise interest rates and the rate is affected almost immediately.
wells fargo will do loans under 50k, and there closing costs were the lowest I have seen. I have 4 loans with wells fargo. 2 of them are under 50k. I had to go stated and they lend 90 percent ltv at 7.75 percent. the full doc rate is of course lower, not sure what it is. they took a really long time to close, but like the above stated, its hard getting a conventional loan for under 50k. but not impossible.