I would think so if you don’t have enough income to support heloc and new debt on investment property, maybe a quad plex that is rented so you can use the current income to offset the dti
I current own a 2 family house (duplex) with a lot of equity. I would like to buy a 1 family house to move into and keep the duplex as a rental property. Is it a good idea to use a heloc for the down payment of the 1 family property?
If the amount you’ve withdrawn isn’t “locked in,” then they may go ahead and lock it in. But, otherwise, no. It’s just like a loan on a car (to simplify it). If the value of the car goes down, you still owe the same amount.
I’m looking to get a heloc to build a guest house to rent out the guest house. Would that be a wise idea? How do payments work on a heloc? I can rent out the guest I just don’t know how long one has to pay off the heloc.
I think using HELOCs to buy/build rentals is a great idea. My HELOC is a 15 year note. When you’re using the HELOC, it’s like a checking account. You just write checks as you need them. When you’re done, the bank converts the money you used into a loan.
@@vanillabreyer did you have to use the rental income or proposed rental income as part of your income to increase thoe loan amount to help sith sebt to income ratio? Did you write up a propsal to the bank?
Could using a heloc effect debt to income ration and disqualify you?
I would think so if you don’t have enough income to support heloc and new debt on investment property, maybe a quad plex that is rented so you can use the current income to offset the dti
This is not a great idea unless it’s a short term loan like doing a BRRR
So you can get a heloc without refinancing your current property?
With these rates your IO payments are able to be covered by your investment rental cash flow?
I current own a 2 family house (duplex) with a lot of equity. I would like to buy a 1 family house to move into and keep the duplex as a rental property. Is it a good idea to use a heloc for the down payment of the 1 family property?
Is. A 1st position heloc a good way to do this ? Or 2nd? I’m trying to figure out which one makes more sense I have 300k in equity
If i get a heloc and my homes value goes down a year later, does that affect my heloc
If the amount you’ve withdrawn isn’t “locked in,” then they may go ahead and lock it in.
But, otherwise, no. It’s just like a loan on a car (to simplify it). If the value of the car goes down, you still owe the same amount.
@@vanillabreyer thank you so much!! I was afraid they can possibly ask me to pay it off early
@@vanillabreyerI didn't know you can lock a interest rate in with a heloc ? I thought they have fluctuating interest rates.
@@extramail850they can also demand you pay balance in full when ever they want, and if you can't pay it back they'll take you house!
@@stanmoney8470 they do i think home equity loans have fixed rates
I’m looking to get a heloc to build a guest house to rent out the guest house. Would that be a wise idea? How do payments work on a heloc? I can rent out the guest I just don’t know how long one has to pay off the heloc.
I think using HELOCs to buy/build rentals is a great idea. My HELOC is a 15 year note. When you’re using the HELOC, it’s like a checking account. You just write checks as you need them. When you’re done, the bank converts the money you used into a loan.
Feel free to ask more stuff if I didn’t actually answer your question or that brought up more questions.
High did the interest rates fluctuate while paying off the Heloc ? I'm asking because I'm thinking of doing this.
yes but ask a loan officer not random ppl on youtube
Great content, question does my current mortgage interest remain the same, would the heloc loan have its own variable interest rate?
In rare cases you can get a fix rate on a heloc, but you still have to pay the existing mortgage as well. Basically you will have two payments.
For HELOCs are the rates adjustable? Or fixed rate? Lol I know stupid question.
Not stupid at all. In most cases a heloc is variable interest rate, but it's not impossible to get a fixed rate
How does it cash flow when your financing 100% of it?
Duplexes have much higher cash flow than SFHs. I get $2,650 a month on an $1,130 mortgage and a $540 HELOC.
@@vanillabreyer did you have to use the rental income or proposed rental income as part of your income to increase thoe loan amount to help sith sebt to income ratio? Did you write up a propsal to the bank?
Is there like a separate heloc loan payment I would have to make each month
Yes
Sheesh 5 months later👎👎👎
What kind of fees do they have?