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Originally Posted by Dominicwasalreadytaken
Ag, are you saying that you don't have a mortgage at all? Just a HELOC? Interesting. How do they regulate your limit on what you can withdraw from the HELOC, since they'll only let you borrow up to 75% of the house worth? I think it makes sense as long as you owe less than 75% on your mortgage before you make the transition over to exclusively a HELOC. Also, the above is a fantastic way to do things IF you have the ability to sock away that money. MissKat, you might not want to try this.
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I don't have a mortgage, just a HE-LOC.
They regulate the limit on what I can withdraw to 75% of the property value. So if I bought the property for 100k and put 25k down on the property, and it shot up to a total value of 300k, they would let me borrow up to 75% of that total. So, because I already borrowed 80k (100k - 20k downpayment), they'd give me up to 225k total (145k cash). You'd end up with a 300k property, 75k in equity (25% value), and 145k cash-in-hand, owing 225k on the place (HE-LOC payments of around $500/month).
It doesn't really make sense unless your property has gone up a lot in value, and your equity in it exceeds %25.