HELOC Credit Impact (100% Loan to Value)

[Joseph Van Fleet]

Hello,

I'm considering a 100% loan to value, home equity line on my primary residence.  It would give me access to around $80k.  

Would this have a negative effect on getting future conventional loans if I didn't use the credit, just had it available?

Right now I have 5 rentals and would like to get a couple more single fam or small multi in the next year or two.  Just trying to be careful to avoid issues down the road with financing.

Thanks a million for any comments or suggestions!

Joe

[Brandon Rush]

Hey Joe,

From my research and experience (just took out a HELOC of $50k) it will not negatively affect your credit score, it may even increase your credit score due to your overall credit utilization being lower with more money being available to you. The HELOC will appear on you credit reports, but that is not a major issue. Now keep in mind, if you were to go and fully utilize the full $80k in your HELOC, that will have a negative affect on your credit score as your utilization will go up. Also, it will affect your debt to income ratio. With all that said, I see no harm in doing it while home values are up. Make sure you ask these same questions to whatever bank you decide to get your HELOC from.

Good luck and let me know if you have any questions.