Lender question; mortgages and helocs
Hello all, quick theoretical question;
If I own my primary home free and clear and were to take out a maximum heloc on it, without using said heloc, how would that impact my ability to get a mortgage too?
So again, the idea is to get the max heloc, not use it until ready to buy an investment property, but also see what a mortgage lender would allow on top of that based on income. The presumption here is ZERO debt whatsoever. How would a lender look at this? Would they simply apply the roughly 1/3 Debt to Income ratio regardless of the heloc facility one has in reserve?
The way I see it is that the heloc is against the home primarily, the mortgage then is primarily against income as if you didn't have the home to begin with. But I have to believe there's a catch with debt to income ratios in using both at the same time.
Thanks!