I have rental property that I personally still put money towards each month (the rent I receive doesn't cover everything). Not only do I have a mortgage, but a line of credit also. Would it be wise to put the money I receive for rent into the HELOC each month as a "payment", subsequently using the HELOC as a checking account?
Although, that does sound like a good plan on paper, I would be careful. Many HELOCS have a limit on the number of transactions that you can make, so I would make sure to know what that number is, or you might be charged a fee for the excess transactions. You also need to keep a close eye on the your HELOC as you will be using it to fill in the shortfall that you are facing each month (you might use up all of your available credit). This plan is not going to help you in the long run, or when you have used up the available credit in your HELOC.
You might want to consider refinancing your mortgage and your HELOC into one fixed rate loan in order to reduce the monthly payment so that your rent can cover that payment. When considering a refinance, always look at the total cost involved. Consumers usually refinance their loans if the new rate they are getting is at least 2 percentage points lower than their current rate, but that might not be the case all the time. Before you can determine whether or not a refinance is a viable option for you, you need to determine how much refinancing you home will cost. Refinancing your mortgage can be a very expensive process, as closing costs, appraisal fees, broker fees, penalties, etc., can quickly add up to well over $10,000, or even more. First, you need to contact your current lender to find out if any early refinance penalties will be charged, and when you can refinance without penalty. You should then contact several different mortgage lenders to discuss the loan terms they can offer you based on your current financial situation.
If you want an introduction to pre-screened mortgage lenders, Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the Bills.com Mortgage Loan Savings Center and find a loan that meets your needs. If you enter your contact information in the Bills.com Savings Center at the top of the page, we can have several pre-screened lenders contact you to discuss the refinance options available to you. These lenders should be able to tell you the loan terms available to you based on your current financial situation, and tell you if a refinance loan can help save you money over your current loan.
I hope the information provided helps you Find. Learn. Save.