Using a personal LOC as a down payment???

3 Replies

Hello BP family,

I live in San Antonio TX and I am getting ready to apply for a personal LOC.

Im trying to figure out if I can use the LOC for a down payment on a conventional loan?

@Alex Loera that's a definite maybe. The best thing to do is ask your lender. I've used personal loans as down payments in the past, but have run into restrictions once in a while. 1. The LOC will change your DTI, so be sure to check those numbers. 2. Some lenders dislike the strategy, but will let you do it if you've cash advanced on the line of credit 30, 90, or 180 days ahead of time. This varies by lender, so again, just ask them. 3. How are you turning the LOC into cash? Depending on the provider, you may or may not get checks or the ability to wire directly from your LOC. Even if you are, the title company may want the check earlier in the process than normal, to be sure the funds clear.

In general, it's possible, but it's always best to walk through the details with your mortgage lender first. If you don't have a good lender here in San Antonio, please let me know and I will be happy to recommend one.

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@Alex Loera

I just started my HELOC process with RBFCU in San Antonio. I am hoping on using the HELOC as a down payment on another multifamily property. This is my first HELOC ever and decided to pursue it after watching several YouTube videos referencing this strategy. Make sure to ask the loan officer as many questions as possible regarding the terms of the HELOC, Early payment penalties, minimum withdrawal amount, draw period, etc.

Good luck Alex.