I'm confused..........re-fi vs. HELOC - Posted by Nate-WI

Posted by Nate-WI on April 12, 2006 at 20:57:52:

Hey all,

I’m set to close on my first rental this coming Monday. I’m going into a one year note at 6.25% interest rate. I’m buying it for 55K and the appraisal came in at 70K. My plan is pull equity out in 6-12 months. My question is this…

Would it have been smarter to go into a fixed loan and do a heloc down the road versus doing a cash out re-fi? Don’t I pay closing costs either way? My thinking was that I would rather pull cash out and have a first lien at a fixed rate rather than 2 liens and maybe a higher interest rate. Any thoughts?