Can I get a HELOC on our primary residence (I am the sole person on the mortgage) and then have my spouse use those funds as a down payment on an investment property (mortgage under spouse name only for the investment property)? Both of our credit is strong 750+ and my spouse has income enough to absorb a good size mortgage but need some extra cash to make the down payment for the second property so was thinking if this was do-able.
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y
Yeah, you can do that, @Eugene Suh. The bank financing your wife's rental will want to know where the money came from. It's best for her to discuss with her bank ahead of time. Some lenders are fine using HELOC funds as a DP, others aren't.
Will the rental still cash flow with the additional leverage?
Thanks @Jaysen Medhurst! Good to know. Will take your suggestion to discuss with a lender on scenarios. In terms of cash flow, we've targeted a handful of potentials that would make it work but still in the planning stage.
Do you happen to know if a reverse scenario is do-able, where the HELOC is taken on existing property which we would then rent out and use the funds to down pay on a new primary home?