I am pursuing a HELOC of $65,000 on my owner-occupied duplex and was wondering how this will affect my DTI ratio when applying for future mortgages.

For normal consumer credit cards, the lender adds up the minimum payments and adds it to the debt portion of the DTI ratio. For my pending HELOC, what amount will future lenders include in their calculation of my DTI when applying for mortgages on different properties?

For example, if I have a zero balance on the HELOC, how do they estimate my payments and factor that into the ratio? If I do have a balance, will they use my current interest payments as my debt obligation or will they pretend the interest rate is maxed out?

Any (detailed) information that people have to clear this up for me would be appreciated, thank you for your time.  

Originally posted by @Andre Chouinard :

I am pursuing a HELOC of $65,000 on my owner-occupied duplex and was wondering how this will affect my DTI ratio when applying for future mortgages.

For normal consumer credit cards, the lender adds up the minimum payments and adds it to the debt portion of the DTI ratio. For my pending HELOC, what amount will future lenders include in their calculation of my DTI when applying for mortgages on different properties?

For example, if I have a zero balance on the HELOC, how do they estimate my payments and factor that into the ratio? If I do have a balance, will they use my current interest payments as my debt obligation or will they pretend the interest rate is maxed out?

Any (detailed) information that people have to clear this up for me would be appreciated, thank you for your time.  

 The Underwriter will base make their calculations based on the entire line being used. So, if the payment is $150 on the entire 65K then that number will be added to your total debt payments.

I hope this helps and have a great day.

Originally posted by @Shaun Weekes :

Originally posted by @Andre Chouinard:

I am pursuing a HELOC of $65,000 on my owner-occupied duplex and was wondering how this will affect my DTI ratio when applying for future mortgages.

For normal consumer credit cards, the lender adds up the minimum payments and adds it to the debt portion of the DTI ratio. For my pending HELOC, what amount will future lenders include in their calculation of my DTI when applying for mortgages on different properties?

For example, if I have a zero balance on the HELOC, how do they estimate my payments and factor that into the ratio? If I do have a balance, will they use my current interest payments as my debt obligation or will they pretend the interest rate is maxed out?

Any (detailed) information that people have to clear this up for me would be appreciated, thank you for your time.  

 The Underwriter will base make their calculations based on the entire line being used. So, if the payment is $150 on the entire 65K then that number will be added to your total debt payments.

I hope this helps and have a great day.

Just to be clear; If I have a zero balance will the underwriter calculate my payment for $65,000 drawn and the maximum interest rate? 

Originally posted by @Andre Chouinard :

Originally posted by @Shaun Weekes:

Originally posted by @Andre Chouinard:

I am pursuing a HELOC of $65,000 on my owner-occupied duplex and was wondering how this will affect my DTI ratio when applying for future mortgages.

For normal consumer credit cards, the lender adds up the minimum payments and adds it to the debt portion of the DTI ratio. For my pending HELOC, what amount will future lenders include in their calculation of my DTI when applying for mortgages on different properties?

For example, if I have a zero balance on the HELOC, how do they estimate my payments and factor that into the ratio? If I do have a balance, will they use my current interest payments as my debt obligation or will they pretend the interest rate is maxed out?

Any (detailed) information that people have to clear this up for me would be appreciated, thank you for your time.  

 The Underwriter will base make their calculations based on the entire line being used. So, if the payment is $150 on the entire 65K then that number will be added to your total debt payments.

I hope this helps and have a great day.

Just to be clear; If I have a zero balance will the underwriter calculate my payment for $65,000 drawn and the maximum interest rate? 

 Example:

Let's say you have a 65K HELOC and you have a zero balance and want to purchase another home. The UW will base their calculation on the HELOC being fully drawn. Whatever that payment is fully drawn ( Even if you haven't drawn anything ) will go against your debt payments.

You make 10k a month and your payments on your credit report are 2.9K.  When you include the mortgage/heloc payment of let's say $1300 your obligations are now 4.2K.

You're DTI is 29 Front end and 42 Back end.

@Andre Chouinard It depends on the bank. At some banks a zero balance wouldn't count at all against your DTI.

Some banks have overlays and figure it differently though.

Here’s another thread on where someone asked the same question: https://www.biggerpockets.com/forums/49/topics/532050-how-does-heloc-affect-lender-debt-to-income-requirements

Originally posted by @Kyle J. :

@Andre Chouinard It depends on the bank. At some banks a zero balance wouldn't count at all against your DTI.

Some banks have overlays and figure it differently though.

Here’s another thread on where someone asked the same question: https://www.biggerpockets.com/forums/49/topics/532050-how-does-heloc-affect-lender-debt-to-income-requirements

 Depends on the bank and their possible overlays - got it. Thank you for the help.

@Andre Chouinard the best way for you to get your answer is ask the loan officer that you are working with.