A home equity loan or line of credit (HELOC) leverages your ownership stake to help you finance large expenses over time. When it comes to investment properties, using a HELOC can be a smart strategy to fund your purchase. Here's everything you need to know about how to use your home equity to buy a new home, including the pros, cons, and alternative options.
Yes, you can take out a HELOC on your primary residence and use the money to buy an investment property. Lenders often set higher down payments for investment properties compared to primary residences, but using a HELOC can help bridge that gap. Home equity loans let you access the equity you've gained in your home over the years. These loans often have lower interest rates than traditional mortgages, making them an attractive option for financing investment properties.
Home equity lines of credit are a convenient way to tap your home's value. We've selected the best HELOC lenders to help you find the right fit for your investment property purchase. If you're looking to buy property overseas as an investment or retirement option, using a HELOC can be a shrewd strategy. However, it's essential to weigh the pros and cons carefully before moving forward.