HELOC for DP? DTI,etc

2 Replies

So my primary house has about 60k in equity that I wish to possibly use as a DP for a multi family Home.

I would need to find a property that cash flows with a mortgage and the heloc payment.

1) what options (other than paying down the HELOC) do I have to eventually consolidate the HELOC balance into a single loan? Can I somehow eventually roll it over in a refinance? If so, how would I do that?

2) DTI- the HELOc payment would be part of my DTI right? When DTI is calculated does the new (MFH) mortgage get calculated into it? Or is it calculated before without factoring in the new mortgage payment?

3) if I cashlow after the PITI and the heloc is paid can I use that to lower my DTI. I think I can use the 75% of the rents collected minus PITI is that correct?

4) would it be better to just get a good BRRR property? I can refinance and pay off the heloc and continue on?

Hi Rigo,

1) you can do a cash out refinance to pay off the heloc to roll it into your current primary ( DTI will be a factor)

2) correct it would be part of your DTI. calculated into it for the 2nd part

3) correct

4) Hard to answer as I dont know your overall situation and what's best for you. what's better for one person isnt always better for the next. 

60k of equity.... and still maintaining 75-80% LTV? Pretty sure you can't do a HELOC at 100% LTV.

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