Line of credit with no DTI requirement?

4 Replies

Hello BP community!

So we're looking to unlock some equity on one of our properties to use as a downpayment on another investment. However we keep running at one problem: high DTI ratio. I've spoken and done applications with big banks and smaller lenders but both ruled out a cash out refi or heloc due to high DTI ratio. I'm looking to see if anyone has gotten a line of credit through a lender that didn't require a DTI. A debt service loan has higher rates which is not working either. Would greatly appreciate any input and guidance.

Thank you in advance. 

Farrukh

I had the same issue couple of years ago with one of our properties. DTI was too high. Our creative solution was we borrowed $100k from a friends HELOC to sit in one of our HELOCS for 2 months to bring down our DTI. We paid $1000 bucks to borrow but we got what we needed which was another HELOC to access cash for an investment. We did have the safety net of if we couldn't get the loan we could easily return the $100k since it was sitting in a HELOC and not in an amortized debt, so there was really no risk for not getting the money back. Not sure if this can apply to your situation but figure I share how we had to think outside the box to get what we wanted. Good luck!

I'm looking for something similar as well. My DTI is high due to 2 private 10 year mortgages. @Chris DeMello , how did borrowing the money from a friend lower your DTI? Or did the bank just look at the money as a "safety net" so to speak? I don't have any rich friends/family, but that's certainly a very creative way to get what you wanted.

@Chris Szepessy It lowered my DTI because it dropped my HELOC balance by $100k. Sat it my LOC for a month then applied for the loan. We tried to get it 6 months prior and DTI was too high, so I told lender we're getting back our "investment money" soon and we'll apply again. lol

@Farrukh Madaminov We only paid 1% interest for that money.  100k x 1% = $1000.00