This week’s question comes from Ricky) on the Real Estate Rookie Facebook Group. Ricky is asking about the pros and cons of using a cash out refinance) vs. using a HELOC (home equity line of credit)), especially since you can pay down a HELOC and use it over and over again.
Many real estate investors take advantage of HELOCs since you can get them for your primary residence or a rental property. That being said, HELOCs can come with variable interest rates and can be closed once up for renewal.
Here are some points to consider:
First see if your primary home qualifies for a HELOC, if not, go the commercial route
Primary residences will get better interest rates compared to commercial HELOCs
Cash-out refinances are a great way to get equity that's been built over time with a low interest, long-term loan
HELOCs may require you to take out from them every year, or be penalized
You may be able to get HELOC closing costs) waived, unlike on a refinance
And More!
If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group)! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).
Check the full show notes here: http://biggerpockets.com/rookie72
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