How Does a HELOC on My Primary Residence Affect My DTI?

[Juan Ayala]

I'm considering opening a HELOC on my personal residence to potentially use as capital for future real estate investments. My question is: how will this HELOC impact my debt-to-income (DTI) ratio, both when it's opened and if I start using it?

Specifically, I’d like to understand:

• Does the full HELOC limit count toward my DTI, or just the amount I actually draw?
• How do lenders typically treat HELOCs when evaluating you for future loans?
• Would it be smarter to open the HELOC and let it sit unused until needed, or does even having it open create a DTI concern?

Thanks in advance for any insight or experience you can share!

[Zach Lemaster]

@Jeff Welgan could likely add some insight here.

I believe it only counts negatively against DTI if you draw while the credit is being pulled. Keep in mind lenders likely do credit checks upfront and right before closing and will question changes.