Rental income considered for HELOC

5 Replies

We recently applied for our firs HELOC on our rental property which has experienced significant appreciation.

We both have decent paying W-2 employment jobs plus the rental income (45200 or so annually) the 2 companies we applied at have had a cap of only taking/accounting for 75% of the rental income and applying it to our Debt to income ratio- leaving me short of what I was expecting to be eligible for in the line of credit. The benefit to this lender happens to be the willingness to go up to 75% LTV on the rental.

Has anyone come across a lender with better options with respect to considering rental income for the HELOC income portion?- for us I am not necessarily looking for the better LTV but really the cap on the debt to income due to their guidelines.

Much obliged!

@Kerry Baird  I actually found a great company in RI for this that got me exactly what I needed and helping me fund future deals based on landlord experience and less on my own debt to income ratio.

Time to connect with investors!

One way to get around DTI is to move it to a commercial loan but that likely wouldn't make sense in your situation.  I have had business LOCs that were solely based on appraisal however they were on properties owned free and clear.

Are you seeing the 75% of rental income because less than 2 years of W2 proof for the rentals? We put our rental under contract in February 2020 and looking to secure a HELOC now assuming the rental income from the rental (or at least 75% of) will be considered. Anyone insight?