Home Equity Line of Credit With A Non Owner Occupied Property - What You Should Know?

This FREE book reveals how to pay off your home in 5-7 years on your current income: Subscribe to our channel Non owner occupied property and you have a home equity line of credit - here are some things to consider.
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The question is weve got a non-owner occupied property which could be an investment property or a vacation home so let me talk about that.
Well let me finish the question first. ADHD.
No medication. Non-owner occupied property on a home equity line of credit.
What should you know? Lets define what a non-owner occupied property is.
It could one be a rental property so something that you never reside in throughout the year and youre renting it out 100 of the time.
The other could be a vacation home.
Something that you do reside in periodically sometimes six months out of the year maybe one or two weeks out of the year.
Then you can also rent that property out when youre not there which thats a really cool topic as well.
If you have a vacation home lets say Destin ...
You buy a house in Destin and you can rent that thing out 40-50 weeks out of the year but youre going to spend 3-4 weeks out of the year hanging out in your own vacation home.
Those can be far more advantageous in the right market than having a rental property say here locally in Nashville Tennessee because those homes generate more cash than a rental property does depending on what that market is. What should you know? If you dont have one get on one.
Get on a home equity line of credit.
If you do get one be sure to treat it with cash flow meaning you put all of your money into it and then when you need to pay your bills you take your money out to pay your bills.
Thats it in a nutshell.
Its really no different than having a home equity line of credit on your primary residence.
There just may be some different overlays meaning you cant take out more than 80 or 85 of the value of that home because its a rental property. You have to look at it from a banks perspective as far as risk.
If something were to happen ...
We get in a recession you lose your job youre going to make payments on your primary residence first before you make payments on your rental property.
Folks typically let those go first so therefore theyre more risky.
Thats why they dont allow you to take out 100 of the value of that home to begin with. Thats pretty much it in a nutshell.
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