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.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.