How will HELOC affects OO VA Loan after a recent refinance?

Question

I will have about $200,000 in equity after closing my refinance. I plan to apply for a HELOC and use a portion of it as a down payment/closing cost in acquiring a new home. How will applying for a HELOC right after closing a refinance as a primary home affect in getting approved for a VA loan for a new home as another primary residence?

Brent Coombs · Answer

@Rommel Pascual, shouldn't be a problem, providing your DTI doesn't become an issue.

(That's exactly what a HELOC should be used for: investing in MORE Real Estate!)...

Rommel Pascual · Answer

@Brent Coombs

There will be some cash flow($1000 - $1200) when rented but a portion of the HELOC would also be used for getting the current house rent-ready ($5000). I haven't done the numbers yet but I guesstimate I should be paying around the same monthly of $1500/month as I did prior to my refinance with the cash flow off setting my new mortgage. This might not be a sound strategy but I'm curious how trying to get a HELOC and VA Loan at the same time affect each others process?

Brent Coombs · Answer

@Rommel Pascual, what can I say? Buying a new primary for $475k, with 100% financing including a 25% higher-than-normal-interest-rate HELOC*, is a LIFESTYLE choice.

Which is a VERY different topic to what THIS website is about: BIGGERpockets. Cheers...

* And will refinancing your existing property to the hilt allow for ANY positive cash flow when rented - or will you be forced to throw extra money into IT every month too?

Rommel Pascual · Answer

@Brent Coombs

Unfortunately, The wifey wants a new house and new homes around my area cost more than the allotted $417,000 for a zero down. Anything above will require 25% down. The house we are looking at are around $475,000. I would prefer to use my VA loan on a less costly home with small cosmetic rehab but a happy wife...happy life. :-)

Thanks for recognizing our service to this country.

Brent Coombs · Answer

Would you even need to take out a HELOC to buy your new primary using a (zero down) VA Loan?

Maybe only take out a HELOC once investing for a higher return than its cost?

Thank you for your service. Welcome to Biggerpockets. All the best...