About Home Equity Loans & Rental Property

Video Transcript

"Hi, this is Matt McKillen with Innovative Financial Group. The question posed to me today was, how do home equity loans relate to rental properties. Well, it used to be in the past from my experience that if you are at an eighty percent or less loan to value, there were many banks out there that would be willing to put either a second mortgage or a home equity line of credit on a rental property. In today's lending arena I'm seeing that program basically going away. Banks are less willing to put a home equity line or a fixed rate second mortgage for cash out on an investment property. Because an investment property is really a riskier investment or collateral for a bank to make a loan on. So my suggestion to you if you are interested in getting a home equity loan or a home equity line of credit, you're better off actually pursuing it on your primary residence. It'll be much easier to get the loan approved plus the interest rate will be under much more favorable terms. Again, my name is Matt McKillen, I'm with Innovative Financial Group."