Using lines of credit for property puchase

3 Replies

Recently, I have decided to try and fund my next property using the line of credit. I have $80k in LOC the interest rate is 9%. I would like to take out a mortgage on the property six months after purchasing it. However if I max the LOC I may find myself unable to qualify for a mortgage due to DTI and/or lower credit score due to high utilization rate of my overall debt. with that said, Would it be a good idea to use this funding source to purchase a property to hold?

Any assistance in this matter would be appreciated

if you have a business line of credit it will not show on your loc I can not remember were it is on BP but it is two area that talk about it in detail and when I read it was a game changer for me . Maybe someone will weigh in and show you were it is on BP and refer you to the area on loc hope that helps you out.

Originally posted by @Mike D'Arrigo :
@Jonathan L.

The LOC is not going to be a problem when you go to refinance it in to a conventional mortgage because you are going to be paying the LOC off. The lender might require you to close the LOC but you should be ok.

Plus the property he buys may have a renter and if he's using conventional financing he can utilize 75% of gross rents - entire mtg payment to calculate the monthly income or expense.

Albert Bui, Lender in CA (#345453), WA (#345453), TX (#345453), and TN (#345453)

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