From Yahoo Finance: 2025-06-05 17:46:00

Using a Home Equity Line of Credit (HELOC) for a down payment on a second home or investment property requires sufficient equity in your primary residence. Lenders typically require 15% to 20% equity, a credit score of 680 or higher, a debt-to-income ratio of 45% or lower, and stable income. With a HELOC, you can access funds up to your approved credit limit for various expenses related to buying a second home. The draw period allows interest-only payments for 10 years, followed by full repayment over 20 years. While HELOCs offer potentially lower interest rates and flexible access to funds, they come with risks like variable interest rates and the potential for foreclosure if you default on payments. Consider alternatives like a home equity loan, cash-out refinance, or personal loan if a HELOC isn’t the right fit.



Read more at Yahoo Finance: Can you use a HELOC for a down payment?