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So, here's what happened. Last month, I worked with our team on a project that looked at different ways for investors to get money. We kept talking about how complicated investment property HELOCs are. There's a lot more to it than just applying for a regular HELOC, so let me make it easier for you.
In theory, a home equity line of credit on an investment property works the same way as a HELOC on your main home. You're using a revolving line of credit to borrow against the equity you've built up in the property. The Consumer Financial Protection Bureau's HELOC guidance says that the structure could have an initial draw period where you can take out money as you need it and only pay interest. T[BA1] his period usually lasts 5 to 10 years (accessed October 28, 2025). After that draw period is over, you start the repayment phase, during which you pay back both the principal and the interest, usually over a period of 10 to 20 years.
But this is where it changes. Lenders think that investment properties are riskier than primary residences. If you get into financial trouble, you'll put keeping a roof over your head ahead of worrying about your rental property. Lenders know this, which is why investment property HELOCs come with extra protections and costs.
Bankrate's 2025 investment property HELOC analysis and Experian's April 2025 lending requirements report say that investment property HELOCs usually need credit scores of at least 720–740, while primary residences only need scores of 650–680 (accessed October 28, 2025). For investment properties, the highest loan-to-value ratio is 75–80%. For primary homes, it can be as high as 85–90%. Also, your debt-to-income ratio requirements are stricter. Most lenders will only lend you 40% to 50% of your income, while the average for primary residences is 43%.
On a personal level, not all lenders offer HELOCs for investment properties. In fact, a lot of big lenders, even some of the biggest names in the business, don't even offer this product. If you're looking into home equity options for your investment strategy, AmeriSave's home equity solutions can help you figure out what types of financing might work for you.
When you want to get a HELOC for an investment property, you usually have to look beyond the big national banks. According to data from several lender surveys done in 2025, your best options are often (accessed October 28, 2025):
Community banks and credit unions are more likely to be flexible with their lending standards, especially for long-term customers with strong relationships. They might offer more personalized underwriting that looks at your whole financial picture instead of just checking boxes on automated systems.
Online specialized lenders: Some online lenders only work with real estate investors and know how rental properties' cash flow works in a way that other lenders don't. They might be able to move faster than regular banks and offer better terms.
Mortgage brokers: These experts can shop around for you with several lenders, which can save you time and maybe even help you find better rates than you could on your own.
Because it's hard to find, you'll have to do more research ahead of time. I've seen investors spend weeks calling different lenders, only to find that maybe one or two will even look at their application.
The rates for HELOCs have been changing all through 2025. Bankrate's national survey of lenders on September 17, 2025, found that average HELOC rates fell to 8.05% after the Federal Reserve cut rates for the first time that year (accessed October 28, 2025). This was the lowest level since March 2025, but rates are still much higher than they were a few years ago, when the average HELOC rate was below 4%.
The Mortgage Bankers Association's 2025 Home Equity Lending Study found that the number of HELOCs and home equity loans made in 2024 was up 7.2%. Lenders expect HELOC debt to grow by almost 10% and home equity loan debt to grow by 7% in 2025 (accessed October 28, 2025). Marina Walsh, Vice President of Industry Analysis at MBA, said, "With close to $35 trillion of homeowner equity in residential real estate and many homeowners locked into low-rate first mortgages, HELOCs and home equity loans have become the product of choice for many homeowners."
According to information from several lenders surveyed in 2025, investment property HELOCs usually have rates that are 0.5% to 1.5% higher than those of similar primary residence HELOCs. If the average primary residence HELOC is 8.05%, you can expect investment property rates to be between 8.5% and 9.5%, and maybe even higher depending on your credit history and the features of the property.
These rates are tied to the prime rate, which means they will change when the Federal Reserve changes its policies. The Fed's rate cut in September 2025 could start a cycle of lower rates. Bankrate's industry analysts think there will be one or two more cuts by the end of 2025.
Let me explain what lenders really look for when you apply for a HELOC on an investment property. Based on a lot of information from Bankrate, Experian, and the requirements of many lenders in 2025, here's the real picture:
Your credit score needs to be good—usually at least 720, but some lenders want it to be 740 or higher. This is a lot more than the 650–680 range that might qualify you for a primary residence HELOC. The higher requirement shows that lenders think investment properties are riskier.
What this means for you is that if your credit score is close to the line, you might want to work on it for a few months before applying. Even small changes can lead to better rates and terms.
Most lenders limit investment property HELOCs to 75–80% LTV, which means you need to keep at least 20–25% equity in the property. This is how the math works in real life.
Value of the property now: $500,000
Balance on Existing Mortgage: $300,000
Your current equity is $200,000, or 40%.
The highest LTV for a lender is 75%.
$500,000 times 0.75 equals $375,000.
$375,000 - $300,000 = $75,000, which is the most you can get with a HELOC.
$75,000 times 0.085 divided by 12 equals $531.25 a month.
This example shows why lenders want a lot of equity: you're keeping $125,000 (25%) of it as a safety net. This is a safer option than primary residence HELOCs, which may let you borrow up to 85–90% of the value of your home.
Depending on the lender, your DTI should stay below 40% to 50%. Here's the catch: when lenders figure out your DTI, they will include rental income from the property, but they will usually only count 75–80% of that income to cover possible vacancies and maintenance costs.
Bankrate's 2025 study of investment property lending requirements says that lenders want to see proof of rental income history, which they often require (accessed October 28, 2025):
• Lease agreements with current tenants
• Proof of two years of rental income
• Proof of long-term leases (not month-to-month agreements)
• Proof that the property is making money or at least not losing money
A lot of investors are surprised by this requirement. Most lenders want to see that you have enough cash on hand to cover your mortgage, HELOC payment, and property costs for 6 to 12 months, even if the property is empty.
Look at it from the lender's point of view. Can you still make all of your payments if your tenant moves out and it takes three months to find a new one? Lenders need to know that you have that safety net.
Usually, the appraisal process for investment properties is more thorough than for primary residences. According to lending standards for the industry that were written down in 2025, appraisers will pay close attention to:
• Rental properties in the area that are similar
• The current state and any maintenance that has been put off
• Ability to make money
• The rental property market in your area
The book answer is that appraisals are simple, but in reality, appraisals for investment properties can be more subjective. The appraiser needs to look at more than just the property's value; they also need to look at how well it can make money.
An investment property HELOC can be a very useful tool when it makes sense. Here are the times when it usually gives the most value:
The 2024 Cost vs. Value Report from Remodeling Magazine says that making smart improvements to your home can greatly raise its value. Kitchen and bathroom renovations usually give the best returns. Quality updates can increase a property's value by 14–20% and also justify higher rental rates.
According to a study by the Mortgage Bankers Association in 2025, home improvements made up 46% of HELOC use in 2024. This is down from 56% in 2023, when more borrowers were using HELOCs to pay off other debts (accessed October 28, 2025).
The flexibility of a HELOC is great for this project because you can take out money as you need it during the renovation instead of all at once. You only pay interest on the money you actually borrowed, which makes it a good choice for projects that take a long time to finish.
The good news is that according to IRS rules, the interest on a HELOC used to make capital improvements to your rental property may be tax-deductible as a business expense. Always talk to a tax professional to make sure you understand your situation, especially since tax laws can change.
Many real estate investors use HELOCs to help them buy more properties. If you can get $75,000 through a HELOC and find a home that costs $300,000, you could use the HELOC to pay the down payment and closing costs and then get a regular mortgage to pay for the rest.
You can grow your portfolio faster with this strategy, which is often called "using leverage to create leverage," than by saving money for each down payment. Of course, the risk is that you're taking on debt on one property to buy another, so you need to be sure you can handle the cash flow from both properties.
Investment properties have a way of needing costly repairs at the worst possible times. If your rental's HVAC system breaks down in July or the roof starts leaking during a storm, having a HELOC means you can fix it right away without having to look for money.
Many of our clients at AmeriSave keep a HELOC as a safety net, even if they never use it. It can be worth the small amount of money it costs to keep the line of credit open just to know that you can get money when you need it.
Let me be honest with you about the pros. These benefits are real, but they only matter if they fit your needs:
You can get money when you need it, not all at once like with a lump-sum loan. You don't have to pay interest on money that is just sitting in your bank account. The Consumer Financial Protection Bureau's HELOC guidelines say that the typical draw period of 10 years gives you plenty of time to use the money wisely (accessed October 28, 2025).
Only paying interest during the draw period—For the first 5 to 10 years, you usually only have to pay interest on the money you borrowed. For a $50,000 draw at 8.5%, that's about $354 a month, which is a lot easier to handle than payments on the principal and interest.
Lower rates than credit cards or personal loans - Even with the extra cost for investment properties, HELOC rates are still much lower than credit cards (which average 20-24% according to Federal Reserve data) or personal loans (which average 10-15% for most borrowers) (accessed October 28, 2025).
Possible tax benefits: If you use the money to make improvements to your rental property, the interest may be tax-deductible as a business expense. This can lower the cost of borrowing a lot.
Your main home is safe. If you can't make the HELOC payments because of money problems, the lender would take your investment property, not your personal home (as long as you didn't cross-collateralize).
Property value leverage means using the equity you've built up instead of letting it sit there. This can speed up the growth of a portfolio for investors who are focused on growth.
Much harder to qualify - Bankrate's 2025 lending analysis says that you'll have to meet stricter requirements across the board, such as having a higher credit score, a lower LTV ratio, more cash reserves, and more complete income documentation (accessed October 28, 2025). Even if they could easily get a HELOC on their primary home, many investors won't be able to qualify.
Higher interest rates: That extra 0.5% to 1.5% adds up over time. For a $75,000 HELOC, an extra 1% in interest costs you about $750 a year.
Variable rate risk: Your rate will change every month or every three months based on changes to the prime rate. Federal Reserve policy statements from 2025 say that rates are likely to go down, but because the economy is uncertain, rates could go back up if inflation picks up (accessed October 28, 2025). At 10.5% or higher, what seems like a good deal could become a burden.
Your rental property is collateral, so there is a risk of foreclosure. The lender can foreclose if you can't make payments, which could happen if the property sits empty longer than you thought it would or if you run into money problems. You lose not only the property but also all the equity you've built up.
Limited lender options: Surveys of the industry show that less than 30% of major lenders offer HELOCs for investment properties. Because there isn't much competition, you have less power to get good terms.
Higher fees: Investment property HELOCs usually have higher closing costs, annual fees, and penalties for paying off the loan early. These can raise your total cost by thousands.
Higher debt service: You're taking on another monthly payment. This makes it harder to get future loans and lowers the amount of cash flow the property brings in.
Here are some other options if an investment property HELOC doesn't work for you or if you can't find a lender who will give you one:
Bankrate's 2025 refinance data shows that rates for cash-out refinancing on investment properties usually fall between 6.88% and 7.26%. These rates may be lower than HELOC rates (accessed October 28, 2025). You get a bigger mortgage to replace your old one, and you get the difference in cash.
Pros: One payment each month, a lower fixed rate, and a big lump sum of money.
Cons: It makes your loan term longer, it costs money to close (usually 2–5% of the loan amount), and it is less flexible than a HELOC.
Best for: big one-time costs like buying a new house or making major repairs
A primary residence HELOC usually has better terms than an investment property HELOC, as long as you meet the requirements. According to a Bankrate survey from September 2025, the average rate for a primary residence HELOC was 8.05%, while the average rate for an investment property was 8.5–9.5%.
Pros: easier to get approved, lower rates, and more lenders to choose from
If you don't pay, your own home could be at risk, and you might want to keep some of the equity for personal needs.
Best for: Investors who want to keep the value of their investment property while still being able to get money
Like a HELOC, but it gives you a lump sum and fixed monthly payments. Bankrate's data from 2025 shows that the average rate for primary residences was 8.28%. For investment properties, the rate was usually 0.5 to 1% higher.
Pros: A fixed rate means that payments stay the same and the repayment schedule is easy to follow.
Disadvantages: Not as flexible as a HELOC, you have to pay interest on the whole amount right away, and it's still hard to find lenders.
Best for: Projects with known costs where you want to be sure you'll get paid
Some lenders focus on real estate investors and offer portfolio loans that look at your whole investment portfolio instead of just one property. According to industry data from 2025, these loans may be more flexible when it comes to underwriting, but they usually have higher rates (8–10%) and shorter terms.
Private lenders give out short-term loans (6 to 24 months) that are usually used for fix-and-flip projects. According to data from the industry, rates are between 10% and 15% and there are big fees up front.
Best for: Buying or fixing up a house quickly and then selling or refinancing it quickly
At AmeriSave, our loan officers help real estate investors look at these options and choose the best financing structure for their investment goals and financial situation.
If you think an investment property HELOC is right for you, here's how to go about it:
To find the maximum possible HELOC, use this formula: (Property value × maximum LTV percentage) - existing mortgage balance.
Keep in mind that you'll probably need to leave 20–25% of your equity alone.
Before you apply:
• Check your credit reports for mistakes
• Figure out your current DTI by adding up all your debts
• Keep records of your rental income, such as tax returns, lease agreements, and rent rolls.
• Check that you have enough cash on hand (6 to 12 months' worth of expenses)
Getting preapproval from at least three lenders is a good lending practice. Search for:
• Local community banks that lend money to investors
• Credit unions that you already belong to
• Lenders who work online and focus on investment properties
• Mortgage brokers who can connect you with a number of lenders who are good for investors
Get these papers ready:
• Tax returns for the last two years (personal and for any LLCs or businesses)
• Current mortgage statements for the property you want to buy
• Proof of rental income (leases, rent rolls, and Schedule E from tax returns)
• Bank statements that show how much cash you have on hand
• Proof that you have homeowners insurance
• Recent pay stubs and W-2s that show how much money you made at work
• An appraisal of the property (the lender will order this)
The lender will have your investment property appraised. Before the appraisal, make sure the property is in good shape and that any maintenance that has been put off is done. The appraiser will look at recent sales and rentals that are similar to yours in your area.
Read the loan terms very carefully, including:
• The interest rate and how often it changes (every month or every three months)
• Length of the draw period
• Terms of the repayment period
• Fees every year
• Costs of closing
• Fees for paying early
My challenge to you is to be honest about whether this way of getting money really works for you.
For the right investor—someone with good credit, a lot of equity, a lot of cash on hand, and a clear plan for how to use the money to make more money than the cost of borrowing—it can be a very useful tool. It works best for experienced investors who know what they're doing and have shown they can handle more than one property at a time.
But not everyone should do it. If you can't meet the qualification requirements, the property barely breaks even on cash flow, or you're not okay with the variable rate risk and the chance of foreclosure, the alternatives might be better for you.
We at AmeriSave think that financing plans should be tailored to each investor's needs. Our team can help you understand your options and make smart choices about how to use your real estate investments, whether you're looking into HELOCs, cash-out refinancing, or other equity solutions.
Bankrate. (2025, September 17). HELOC rates drop to lowest level since March, as Fed cuts rates for the first time in 2025. https://www.bankrate.com/home-equity/heloc-rates-drop-to-lowest-level-since-march-as-fed-cuts-rates/. Accessed October 28, 2025.
Bankrate. (2025, June 23). Guide to HELOCs on investment properties. https://www.bankrate.com/home-equity/heloc-on-investment-property/. Accessed October 28, 2025.
Consumer Financial Protection Bureau. (2025). What is a home equity line of credit (HELOC)? https://www.consumerfinance.gov/ask-cfpb/my-lender-offered-me-a-home-equity-line-of-credit-heloc-what-is-a-heloc-en-246/. Accessed October 28, 2025.
Consumer Financial Protection Bureau. (2024). What You Should Know About Home Equity Lines of Credit. https://files.consumerfinance.gov/f/documents/cfpb_heloc-brochure.pdf. Accessed October 28, 2025.
Experian. (2025, April 26). Can You Get a HELOC on an Investment Property? https://www.experian.com/blogs/ask-experian/can-you-get-heloc-on-investment-property/. Accessed October 28, 2025.
Federal Reserve Bank of St. Louis. (2025). All Sectors; Total Home Equity Lines of Credit; Asset, Level. FRED Economic Data. https://fred.stlouisfed.org/series/BOGZ1FL893065215Q. Accessed October 28, 2025.
Federal Reserve Bank of St. Louis. (2025). Credit Card Interest Rate (TERMCBPER24NS). FRED Economic Data. https://fred.stlouisfed.org/series/TERMCBPER24NS. Accessed October 28, 2025.
Federal Reserve System. (2025). Federal Reserve Policy Statements. Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/. Accessed October 28, 2025.
Mortgage Bankers Association. (2025, July 28). MBA Home Equity Study Shows Increase in Originations, Debt Outstanding in 2024. https://www.mba.org/news-and-research/newsroom/news/2025/07/28/mba-home-equity-study-shows-increase-in-originations--debt-outstanding-in-2024. Accessed October 28, 2025.
Remodeling Magazine. (2024). Cost vs. Value Report. Hanley Wood, LLC. https://www.remodeling.hw.net/cost-vs-value/2024/. Accessed October 28, 2025.
The Mortgage Reports. (2025, February 11). Best HELOC Lenders for Investment Properties. https://themortgagereports.com/97049/heloc-on-investment-property. Accessed October 28, 2025.
You can get a HELOC on a rental property if you have good credit, but you will need more than just a good credit score to qualify. Most lenders want a credit score of at least 720 to 740 for investment property HELOCs. This is a lot higher than the 650 to 680 that is usually needed for a primary residence. Lenders will look at more than just your credit score. They will also look at your debt-to-income ratio (which should be less than 40–50%), your cash reserves (which should be enough to cover 6–12 months of expenses), and the property's income history. After you set up the HELOC, you'll also need to have at least 20–25% equity left in the property. Bankrate's 2025 lending analysis says that even people with great credit may have trouble finding lenders who offer investment property HELOCs. This is because many of the biggest lenders don't offer this product. Community banks, credit unions, and specialized online lenders that work with real estate investors are usually your best bets.
There are a few big differences between investment property HELOCs and primary residence HELOCs. According to several lender surveys from 2025, investment properties need higher credit scores (720–740 vs. 650–680), lower maximum loan-to-value ratios (75–80% vs. 85–90%), and more cash on hand. Lenders see investment properties as riskier, so they charge 0.5% to 1.5% more in interest. They assume that if you have trouble paying your bills, you'll put your personal home first. The qualification process is more thorough. Lenders want to see detailed proof of rental income, tenant history, and how well the property is doing in terms of cash flow. Also, you'll have fewer lenders to choose from because a lot of big banks don't even offer HELOCs on investment properties. The draw and repayment periods are similar, but the costs and requirements make a big difference in how easy and cheap they are to get.
There are a few things that affect how much you can borrow with a rental property HELOC, but the loan-to-value ratio is the most important one. Most lenders limit investment property HELOCs to 75–80% LTV, which means you need to keep at least 20–25% equity in the property. To find out how much you can borrow, multiply the current value of your property by the lender's maximum LTV percentage and then subtract your current mortgage balance. You could borrow up to $120,000 if your rental is worth $400,000 and you owe $200,000, and the LTV limit is 80%. But your actual approved amount may be lower because of your credit history, debt-to-income ratio, cash reserves, and the property's rental income history. Multiple lenders' data from 2025 show that most investment property HELOCs are between $50,000 and $150,000, but borrowers with good credit and valuable properties may be able to get more.
Yes, you can use a HELOC from your main home to buy an investment property. In fact, this is a very common way for real estate investors to do it. Chase's 2025 lending information says that if your credit line is big enough, you can use primary residence HELOC funds for the down payment, closing costs, or even the whole purchase of an investment property. This method has a few benefits: it's easier to qualify for (primary residence HELOCs have less strict requirements), the interest rates are lower (8.05% instead of 8.5-9.5% for investment property HELOCs, according to Bankrate's September 2025 data), and there are more lenders to choose from. The biggest problem is that you are putting your main home at risk as collateral. If your investment property doesn't make as much money as you thought it would or you run into money problems, failing to pay back the HELOC could mean losing your own home. You also need to make sure that your debt-to-income ratio can handle both the HELOC payments and the new mortgage on the investment property you're buying.
Yes, having a HELOC on an investment property can save you a lot of money on taxes, but the details are very important. The IRS says that interest paid on a HELOC used to make capital improvements to your rental property is usually tax-deductible as a business expense. Adding square footage, replacing the roof, installing a new HVAC system, or making major changes like remodeling the kitchen are all examples of capital improvements. Basically, anything that makes the property more valuable or extends its useful life. This deduction can significantly lower the cost of borrowing for you. But you can only deduct the interest if you use the money for business purposes related to the rental property. You can't deduct the interest on a HELOC loan if you use the money for personal expenses. It's also important to remember that tax laws can change, and there may be limits on how much you can deduct depending on your situation. In 2025, several tax advisory sources said that you should talk to a qualified tax professional to find out how the interest deduction applies to your situation and to make sure you're keeping track of how you're using the money and claiming deductions correctly.
Your HELOC rate will change when the prime rate changes. The prime rate is very similar to the Federal Reserve's federal funds rate. Bankrate's 2025 study of how HELOCs work says that when the Fed raises or lowers its benchmark rate, the prime rate usually moves by the same amount, and your HELOC rate follows soon after. Most HELOCs change every month or every three months, so you'll notice a difference within a few weeks to a couple of months after the Fed makes a decision. According to Bankrate's national lender survey, HELOC rates fell to 8.05% in September 2025, their lowest level since March 2025. This happened when the Federal Reserve cut rates by 25 basis points. The prime rate plus a margin (usually between 0.5% and 2% depending on your credit history and the terms of your loan) makes up your specific rate. Your rate would go down by the same amount if the Fed cut rates by another 25 basis points. On the other hand, if inflation rises and the Fed raises rates, your HELOC payment will go up. Because the interest rate can change, your monthly payments may also change over time. This is why it's important to make sure you can still make your payments even if rates go up by a few percentage points.
It usually takes three to six weeks to get an investment property HELOC approved, but this can vary a lot depending on the lender and your situation. Industry data from several lenders in 2025 shows that the process usually takes longer than primary residence HELOCs because there are more paperwork and underwriting requirements. You should plan to spend the first few days getting the paperwork you need, like two years' worth of tax returns, proof of rental income, lease agreements, bank statements, and proof of insurance. After that, the lender will order an appraisal, which usually takes one to two weeks to schedule and finish. Lenders look closely at the property's income potential, your cash reserves, and your overall investment portfolio when they underwrite an investment property. This is more detailed than when they underwrite a primary residence. If you have all the paperwork ready ahead of time, some specialized online lenders and portfolio loan providers may be able to finish the process in two to three weeks. Get all the paperwork you need ready before you apply, respond quickly to any lender requests for more information, and make sure your investment property is in good shape before the appraisal to speed up the process.
If your investment property is empty and not making money from rent, you still have to make HELOC payments. This is one of the biggest risks of using a HELOC to buy an investment property. This is exactly why lenders require 6 to 12 months of cash reserves: they want to be sure you can keep making payments even when you aren't renting. During the draw period, you usually have to make at least interest-only payments on the amount you borrowed. Once you start paying back the loan, you'll have to pay both the principal and the interest, even if the property doesn't have any tenants. If you can't make the payments, the lender can start the process of foreclosing on your investment property, and you'll lose both the property and the equity you've built up. This risk makes it even more important to keep enough cash on hand, carefully screen tenants to keep turnover low, and honestly figure out if you can afford the HELOC payments from your other income sources if rental income stops. Many seasoned investors keep larger amounts of cash on hand to cover long periods of vacancy, damage to property, or unexpected major repairs.
Some lenders let you change all or part of your HELOC balance to a fixed rate, but not all lenders do this, and there are usually specific terms and conditions that come with it. Bankrate's 2025 study of HELOC products found that different lenders offer very different fixed-rate conversion options. You might be able to lock in a fixed rate on a part of your balance when it's available. However, the fixed rate is usually higher than your current variable rate because you're paying for stability. There may be minimum balance requirements for conversion, limits on how many times you can convert balances, and possibly conversion fees. Some lenders only let you use this feature during the draw period, not when you pay it back. If you want your rates to stay the same, you should ask potential lenders about fixed-rate conversion options before you choose a HELOC. You could also think about getting a home equity loan instead of a HELOC. Home equity loans have fixed rates from the start, but you can't draw money from them whenever you need it. You have to choose between flexibility and rate certainty, and the right choice depends on your needs and how much risk you can handle.
It depends on how you plan to use the money and the terms of your current mortgage whether a HELOC or cash-out refinance is better for your investment property. Bankrate's 2025 lending data shows that cash-out refinance rates for investment properties range from 6.88% to 7.26%. This is lower than investment property HELOC rates, which range from 8.5% to 9.5%. If you need a large sum of money for a specific purpose, can get a lower interest rate than your current mortgage, and are okay with making a fixed monthly payment, a cash-out refinance makes sense. You'll have to pay closing costs that are between 2% and 5% of the loan amount, and the loan term will start over at 15 or 30 years. A HELOC is better if you want to be able to get money whenever you need it, only pay interest on what you use, and plan to use the money for projects that will take a long time to finish. Data from a number of lenders shows that HELOCs are good for home improvements when you don't know how much they will cost or for keeping a financial safety net for repairs that come up unexpectedly. The best thing about a HELOC is that you only pay interest on the money you take out, while with cash-out refinancing, you pay interest on the whole amount from the start. We help investors figure out which financing option is best for them at AmeriSave by looking at their individual situations, current mortgage terms, and investment goals.
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