Effect of Credit - HELOC or Second Mortgage
09-12-2007 12:43 PM
When I bought my condo I did an 80/20 split over 2 30-yr fixed mortgages. Since then my home has appreciated and I would like to use my equity/appreciation to get a lump sum cash loan that I can use to invest in another property with a friend (we are flipping a house - should take 12 months). After a year I should have a lum sum I can pay back the additional $$ that I took out on the loan.
Because I already have 2 mortgages I need to refinance the 2nd mortgage to get the cash loan. can you please advise though which is better for my credit score - refinancing the 30-yr second mortgage or refinancing for a home equity line of credit. I thought I heard that the HELOC is not as good since it can be considered revloving credit....
I have great credit score right now and I feel comfortable with sticking with another 30-yr mortgage, but just want to make sure I am making the right choice in terms of my credit score.