Everything about homeownership

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:

Investment Limit From Home.LLCUp to $500,000Up to $500,000
Loan Limit From LenderUp to $3.5MCheck 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 closingUsually within 30-90 days post closing
Private Mortgage Insurance (PMI)No PMI PMI only for 2-4 installments
Application FeesOptional 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 feesNo prepayment feesNo 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. 

Anshika Burman

Anshika is a top-ranking graduate from Symbiosis International University. Previously, she worked in corporate finance at Dabur. She joined Home.LLC while pursuing her CFA.

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