Hello BP. Recently, a great opportunity has presented itself and I am looking for ways to fund this deal since our cash reserves are currently low. I'm thinking about taking out a HELOC to fund the down payment and renovations, applying for a loan, and then re-financing after the renovations. However, I'm wondering if the application for the HELOC will affect my ability to get a loan?
We have stellar credit scores, but we already own one rental and are still paying on student loan debt... I'm worried opening a HELOC will make it impossible to get a loan.
@Helen Lowery , it shouldn't, providing your resulting DTI is still acceptable to the Lender.
It's probably the best method of accessing the equity you have in your own home!
[Not official financial advice]. Welcome to BP. All the best...
@Helen Lowery the most important step to do here is speak with your lender who has already preapproved you for your loan. They will be able to tell you if the numbers can support a HELOC. Your credit score won't an issue either way but being able to "afford" the HELOC is important. Hope this helps.