| Would-be investors often ask whether or not it's a | | | | equity line of credit (HELOC) rather than to refinance |
| good strategy to refinance their home in order to | | | | the first mortgage. This money can be used over and |
| purchase investment property. The answer is a | | | | over without paying new loan costs. In other words, |
| definite: maybe, but it depends upon a variety of | | | | the investor can purchase one house, sell it, pay the |
| factors. | | | | money back and then have immediate access when |
| RiskWhenever you take on an investment property by | | | | another bargain property comes along, without paying |
| borrowing the money to get it, you're assuming a risk | | | | more loan fees.So investigate both options before you |
| that the cost of borrowing that money will outpace the | | | | make any decision to borrow, and make sure you're |
| property's income, which can cause severe negative | | | | comfortable with the risks that are inherent in any |
| consequences over time. | | | | investment opportunity, because things can and do go |
| HELOC | | | | wrong--and when they do, your home may be in |
| Sometimes it makes more sense to take out a home | | | | jeopardy. |