HELOC vs. Recast
HELOC vs. Recast: What’s better?
You can use a HELOC or a Recast as a temporary loan to quickly buy your home before getting an investment from Home.LLC
To know more about how to use a HELOC with Home.LLC, click here
To know more about how to use a Recast with Home.LLC, click here
Here’s how they compare:
| HELOC | Recast | |
| Investment Limit From Home.LLC | Up to $500,000 | Up to $500,000 |
| Loan Limit From Lender | Up to $3.5M | Check your county limit here |
| Minimum Down Payment | As low as 5% but usually 10% | As low as 3.5% but usually 5% |
| When is it refinanced? | Usually within 72 hours post closing | Usually within 30-90 days post closing |
| Private Mortgage Insurance (PMI) | No PMI | PMI only for 2-4 installments |
| Application Fees | Optional fees of $200-$500 to ‘close’ the HELOC that can be avoided by keeping the HELOC ‘open’ | Recast fee usually ranges from $0 to $400. |
| Prepayment fees | No prepayment fees | No prepayment fees assuming home bought as a primary residence |
In both cases, your monthly costs will go down as you’ll only borrow 80% from the lender and eliminate PMI.