HELOC or pre-approved mortgage first

[Ed Kelly]

I plan on investing in a vacation rental in the smokies. I'd like to get a HELOC on my primary residence to help with the purchase and/or future unexpected expenses. One of my questions is should I be looking to get pre-approved for a mortgage, or even close on the mortgage, before pursuing the HELOC? If I get the HELOC first, how does that impact getting pre-approved for a mortgage?

Thanks!

[Eddie Brady]

Getting approved for your HELOC is not based on your DTI ratio. So if you're worried about that, use a mortgage for your first purchase and then the HELOC for the next. If you were to take out a HELOC first, it will reflect in your DTI ratio when you have debt on that line and could affect your next mortgage.