If I were to obtain an 80k HELOC but not use any of the funds, how would that affect my DTI levels? I'm considering purchasing a house with a 60 day IRA loan, then putting the funds back in my IRA after closing so that I can keep my DTI levels down during the purchase.
Most likely the lender will base that particular loan off of the entire amount. So if the most you can borrower is 80k you're looking at 80K x 6% 12 = $400
The lender will count the $400 against your DTI
Obviously if your interest rate is less or more the payment will move up or down.
I hope this helps.
We're going to look at the minimum monthly payment, just like we would for a credit card or car loan.
Technically if it's an interest only payment we are supposed to do some math that beats you up a bit more than the minimum payment, but I've never had an underwriter take out the 9 button calculator to do that math and figure out that it's an i/o payment. And I'm just a dumb originator, so wouldn't you know it - I never notice either.
I think @Gloria Mirza is asking what if she had a HELOC with a zero balance. If so, there wouldn't be a minimum payment. Would one be imputed based on how much of her credit line she COULD use? I'm curious myself and have wondered about the same thing.
I have a couple HELOCs with very large limits, but zero balances. Wondering how an underwriter would view those as I haven't applied for a loan since obtaining them. I imagine different lenders/underwriters would have different policies on the matter, but I'm hoping they'd view the HELOC similar to a credit card (zero balance = zero effect on your DTI) as opposed to a car loan (which is a debt for which the monthly payment would definitely be factored into your DTI).
Anyone know for sure?
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