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Need Cash out - HELOC vs 2nd Mortgage

I am getting ready to leave my full time employer and work full time in my business, Talent Agency. I want to put away enough money for emergencies and extra business expenses. I do not have business credit so i cannot get a loan yet. I do have about $250k equity in my home and want to take out $100k. I wanted to know the benefits to HELCO vs a 2nd mortgage. I do have good credit, 720 FICO and my 2017 tax return grossed $212,599. Also, should I take out the money before I leave my employer? I really do not want a monthly payment as I will be somewhat unstable for the first 12 months. Is there any alternative to HELCO where I can just take the money out with out paying back in the form of a loan? Thank you - I know you guys can help :D by 0vada688 from Beverly Hills, California. Aug 23rd 2018 Reply


KIYOSHI INUI (Kiyoshi)
#2 ranked lender in California - 108 contributions

HELOC vs FixedRate: Lower / HigherTerm: Adjustable vs FixedPayment: Initially Interest Only vs Principal & InterestHELOC's are like a credit card. You take only when needed & only pay on what you borrower. FIXED Second: You take all the cash as a lump sum and start paying on all of it immediately. Depending on your business and timeline for you ROI, I would recommend the HELOC. You would be off to a horrible start if your ROI was longer than expected and had to start using the money you took out for your business only to make the mortgage payment. Money out without the form of a loan would probably be an investor, but if it's not a loan then it would mre than likely giving up a % of your business.Hope this helps & good luck with your new endeavor!

Aug 23rd 2018
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Dan Paladin (dpaladin)
#1 ranked lender in California - 525 contributions

Well, you have several issues that could present itself regarding verification of employment. If you are leaving "soon"...the VOE completed by the employer most likely will reflect that. Then being self-employed brings different employment guidelines into play. As far as loans with "no payments" while funds are dispersed there are none.So a more detailed discussion would be needed to plan ahead to see which option is best. As for a biz loan, I do have options for that as well, with a min 700 Fico...up to $100K. If you would like more details feel free to contact me...562.254.5616

Aug 23rd 2018
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