Close

See current mortgage rates on Zillow Mortgage Marketplace

Profile picture for user01001619

Refinance vs Home Equity Loan vs HELOC

I am looking at possibly purchasing an investment property for around 60k.  I currently have one other investment property, worth approximately 100k with 35k remaining on that mortgage.  I will need at least 20k for the down payment on the new property, but don't have the cash to do it.  Would it make more sense to refinance the first rental property to take money out, or do Home Equity Loan, or a HELOC?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 12 2013 - Cloquet
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (2)

I agree with Steve, you may have a difficult time trying to get a HELOC on an investment property.  The "cash out refinance" on the investment may be a viable option to generate the liquid cash you need.  With rates still low you can access the equity you need and get a fixed rate mortgage on your equity.  
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 13 2013
A HELOC on an investment property would be tough to find.  I am refinancing my rental right now that I purchased 8 months ago.  It is possible to do a cash-out refinance up to 75% of the current appraised value as long as you have owned it for 6 months.  This is a Freddie program, so you get the best rates as well.

I think it is better to keep the debt on the investment properties instead of taking a loan on your primary residence for tax purposes.  I could be wrong (check with your CPA) but I believe you cannot put mortgage interest for liens on your primary residence on the schedule E.

So, you could take a loan for 75k, pay off the 35k and after costs you should have about 35k or more to work with.  You would have the down payment cash and some rehab money if needed.  I can recommend a good local bank who has an awesome rehab purchase product as well if you need it.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
September 13 2013
 
Related Questions
Refinance vs Home Equity Loan vs HELOC
Profile picture for Michael Kirkutis
Latest answer by Michael Kirkutis
September 13 2013 | 2 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 1611 Prospect Ave, Cloquet, MN Home For Sale
    1611 Prospect Ave, Cloquet, MN 55720

     For Sale: $129,900

    • Beds: 4
    • Sqft: 1256
    • Baths: 2.0
    • Lot: 6969
  2. 435 9th St, Cloquet, MN Home For Sale
    435 9th St, Cloquet, MN 55720

     For Sale: $104,900

    • Beds: 3
    • Sqft: 1079
    • Baths: 1.0
    • Lot: 4791
  3. 1 Connor Rd, Cloquet, MN Home For Sale
    1 Connor Rd, Cloquet, MN 55720

     For Sale: $290,000

    • Beds: 3
    • Sqft: 1888
    • Baths: 2.0
    • Lot: 3810193