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An American couple is eyeing a dream home in their hometown of Abruzzo, Italy, hoping to finance the purchase using a home equity line of credit.
They hold dual U.S.-Italian citizenship, have vacationed in the town for years, and now have the chance to buy a fully furnished, renovated property from family friends for 220,000 euros ($256,000). The home generates about $7,000 annually from Airbnb rentals.
With about $100,000 left on their U.S. mortgage at a low 2.6% interest rate, the couple considered paying it off and then tapping a HELOC to avoid juggling two mortgages. But when they posted about the idea on Reddit recently, they found out they weren’t alone, and not everyone thought it was a great plan.
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“No. No. No. Hell no,” one person warned. “Do not put the roof over your head at risk to buy an investment property on the other side of the globe. Sounds awesome but hell no.”
“I get why you’re considering it, but I’d be cautious about paying off a 2.6% mortgage just to take on a higher-rate HELOC,” a person replied. “The bigger question is whether you can comfortably carry your current mortgage plus a HELOC payment without counting on the Airbnb income.”
Others echoed that concern. “That Airbnb income is on the low side,” another wrote. “Don’t forget that if you stretch your finances, you won’t lose the Italy house, you’ll lose the U.S. one.”
Several commenters advised against touching the existing mortgage at all. “Leave that cheap mortgage as is. Don’t make extra payments,” one advised. “Use that cash towards the Italian property.”
Still, some were more optimistic. “If it’s your dream and you can afford it, why not? Enjoy your life,” one said. Another added, “Not everything is a money decision.”
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While many agreed a HELOC was the most practical option given how hard it can be for Americans to get a mortgage in Italy, a few offered alternative financing routes. Seller financing was a standout idea that gained traction.
“Have your friends hold the note,” one person suggested. “Give them a down payment. Make sure you outline the terms clearly and get the note done legally.”
“Take the cash you have (~$100k) as down payment for your friend and have them seller finance the balance in 5-10 years with a 3-4% rate,” another said. “You can take the income from the property and pay back your friend.”
“I kinda like this idea the more I think about it,” the original poster replied. “I like to hear all my options that I didn’t even consider before.”
Some commenters said they refinanced their primary homes instead of using a HELOC. “We did this,” one wrote. “Just refi’d our primary home. Much higher rate, true, but better than a HELOC.”
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Another option discussed was using a home equity loan instead of a HELOC, since loans often come with fixed rates.
Many Americans seem to be wrestling with the same idea: owning a slice of Europe to vacation in, rent out, and potentially retire to. But the realities of foreign property ownership, management, maintenance, legal complexity, and exchange rates often clash with the fantasy.
For those who want exposure to real estate without the international headaches, alternative platforms are popping up. One such option is Nada, a platform that allows accredited investors to invest in U.S. home equity through Home Equity Agreements. With target net returns of 14% to 17% and no property management involved, Nada’s U.S. Home Equity Fund I offers a hands-off way to benefit from residential property appreciation.
As the dream of international homeownership meets financial caution, many Americans are realizing there are more ways than one to invest in real estate. Whether through a second home overseas or passive exposure through structured agreements, it comes down to lifestyle, risk tolerance, and long-term goals.
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This article They Want To Use HELOC To Buy A Vacation Property In Italy. Turns Out, Many Americans Had The Same Idea. Here’s How Some Of Them Pulled It Off originally appeared on Benzinga.com
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