Are HELOCs always counted in DTI?

[Katrina P.]

Hi All!

We will soon be purchasing a new primary residence. However, we would love to establish a HELOC here (for the purposes of investing) prior to purchasing the new home. My question is are HELOCs always factored into your DTI even if the balance is $0 when closing on the new home?

[Chris Mason]

Quote from @Katrina P.:

Hi All!

We will soon be purchasing a new primary residence. However, we would love to establish a HELOC here (for the purposes of investing) prior to purchasing the new home. My question is are HELOCs always factored into your DTI even if the balance is $0 when closing on the new home?

 Different lenders actually look at this differently. The most liberal will use the $0 payment at $0. The most conservative will count the fully maxed out "hypothetical" payment against you (less common these days).