Will opening line of credit for rehab impact lending for rental

2 Replies

i would like to open heloc for future rehab. 

I also buy properties for long term holdling, 

My questions is that if I open HELOC first, will this amount be counted as part to liabilty thus impact ledin hour for future.

Thanks BP



We had a HELOC on our primary residence. We then refinanced the primary, and they paid off and closed the HELOC, which was not expected. The lender said the HELOC is like a big credit card. It did affect our Debt to Income.

For long term holds, we aimed to get to the 10 Fannie gov't backed mortgages.  Having so many months of reserves was becoming onerous for us, as we were trying to use those same funds as down payments.  So we switched over to portfolio loans, where the lender is looking at the Debt Service Coverage Ratio, which is net operating income / total debt service.