New to investing, need advice on funding and paying down current DTI

Fort Collins, Colorado
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New to investing, need advice on funding and paying down current DTI

Felicia Jarrett
Member since 2025 · 7 posts · 4 votes

Hello My name is Felicia J, I have always loved Real Estate but never really got into investing. I owned my first home at 25 and now me and my hubby have a single family home. We have a large amount of equity in it and I am thinking a heloc would be great to do limited improvements and invest in real estate. I have a small business that I run out of my garage rebuilding and refinishing furniture. My husband has a w2 position in the oil and gas industry. He is on board with me taking the lead and building our wealth. We have struggled all our lives and in some ways still is, but I feel my purpose in life is bigger than struggling. I want to be comfortable in my old age and not have to worry about where will my next check will come from, will I have enough money to survive on moving forward in my old age. I am getting into this late in life but I feel like it can be done with he right guidance. I am 48 and I really want to create generational wealth like never before. It has not ever been created within my family and I really do not want my children and grand children to have to struggle the way I and my husband have in life. 

I am not afraid of hard work and I am willing to learn what I can to do whatever job I need to do. I have proactively started this journey by purchasing a Real estate course to get my license. I have been going to meetings with ladies in real estate to learn all I can and get contacts within this field. I am ready, willing and able. 

Now my dilemma is we have a high DTI well my husband does and his credit is below 700. We pay our bills on time but its seems to impossible to get a loan to consolidate our credit cards and then get a heloc. I am not even sure if that's the best move. I guess my question is does any one have any advice on what we can do to get the capital to start this journey? Thanks so much for allowing to tell my story. We live in Colorado

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  • Deb S.
    Investor · Punta Gorda, FL · Member since 2010 · 154 posts · 128 votes
    1y

    Hi Felicia,

    You have the right mindset for wanting to care for your family. Based on the info you provided, it would seem like it makes more sense to pay down your husband's debt first. How much debt does he have? I'm going to assume it's mostly credit card debt and maybe a car loan?

    I have 2 ideas for paying that debt (if those interest rates are high): 

    one is that if your husband has a 401k at his employer, he could take out a loan (which typically has a very low interest rate) and use that money to pay off the debt or most of it. Now this loan will not show up on his DTI because only his employer knows about it, nor does he have to qualify for it like a traditional loan. Obviously the loan needs to be paid back so he can make payments to his 401k rather than the creditors he is paying now that are charging higher rates. And if he really wants to pay it off faster, than he can stop contributing to the 401k and add THAT amount to the amount he pays the creditors each month to get it paid faster.

    option 2 is to use a HELOC to pay off the debt but I'm not sure you'll qualify with the DTI being so high. You could speak to your bank and ask what the criteria is for qualifying for a HELOC.

    Keep networking with those real estate ladies and learn from them. You want to surround yourself with people that have the knowledge and skills you want. I know this isn't the answer you were hoping for but it will be difficult to create generational wealth if you're already starting in a hole. Take care of yourselves first and THEN build generational wealth.

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  • Patrick Roberts
    Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
    1y

    Get a home equity loan/heloc and use it to pay off the credit card balances, then pay it down as quickly as possible. The interest rate on the loan should be much lower than what youre paying on your cards. Also, determine how you got into credit card debt in the first place and make sure a plan is in place to prevent this from happening again. Otherwise, in a year or two you'll find yourself with both heloc debt and credit card debt. 

    Your first priority for investing should be getting the credit scores over 720. For any kind of investment property loans (Conv, DSCR, whatever), scores below 700 are going to make things expensive for you.

    At the same time, start attending local REI meetups and networking groups. You'll learn a ton from other, more experienced investors, as well as make some solid connections to help land deals.

    I'd be cautious about drawing on the heloc for investing, other than using it to fund to incidental investment expenses or small EMD amounts. Given that yall have credit card debt, it doesnt sound like there is a ton of capacity to recover from a major loss. Save up some cash and use private lending for any flips/rehabs. Keep the undrawn heloc for emergency liquidity. If yall have large 401k/retirement account balances, private lending could be an option for you as well.

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    • Felicia Jarrett
      OP
      Member since 2025 · 7 posts · 4 votes
      1y

      @Patrick Roberts  thank you so much for all the advice. I have already started getting into groups and learning from others who are investing . 

      0Reply
  • Bob Avery
    Investor · Saint Paul, MN · Member since 2024 · 28 posts · 16 votes
    1y
    Quote from @Felicia Jarrett:

    I am not afraid of hard work and I am willing to learn what I can to do whatever job I need to do. I have proactively started this journey by purchasing a Real estate course to get my license. I have been going to meetings with ladies in real estate to learn all I can and get contacts within this field. I am ready, willing and able.

    The job you need to do could be as simple as a literal second job to pay off the consumer debt and save a down payment.
    0Reply
  • Terrance HillPro Member
    Realtor · Memphis, TN · Member since 2010 · 425 posts · 117 votes
    1y

    Hey Felicia,

    A few thoughts based on what you’ve shared:

     Tapping equity with high DTI and credit challenges
    You're absolutely right to consider a HELOC, but lenders typically want a credit score around 700+ and a reasonable debt-to-income ratio. Since your husband's score and DTI are the bottlenecks, here's what I'd do:

    1. Focus on improving his credit over the next 3–6 months — pay down balances (especially if any are over 30% of the credit limit), keep accounts open, and avoid new hard inquiries. That alone can push a mid-600s score above 700.
    2. Look at a personal loan consolidation from a credit union or online lender (like SoFi or LightStream). This mightimprove your DTI by lowering monthly payments, which could help with qualifying for a HELOC later.
    3. Explore HELOCs or cash-out refis under your name only — if your credit and income allow it. Some lenders will do this if you’re on the title, even if your husband is on the original mortgage.

    Creative ways to raise capital while working on credit:

    • Sell a few of your refinished furniture pieces and set up a dedicated “investment fund” — even a few hundred dollars a month adds up.
    • Look into partnerships or private lending — people love partnering with driven, hands-on people like you. Maybe someone with capital but no time would love to team up.
    • Consider seller financing or lease options for your first investment deal — these require little or no bank financing if structured right.

     Use this year to become an expert. You’re working toward your real estate license, which will open doors to education, deals, and income. Combine that with networking and staying consistent, and you’ll be ready to act as soon as the financing pieces fall into place.

    Felicia, I’ve worked with investors who started at 50 and scaled to 10+ properties in just a few years. It’s absolutely possible. You already have the two most important ingredients: a strong “why” and a relentless work ethic. Keep showing up — this is your season.

    0Reply
    • Felicia Jarrett
      OP
      Member since 2025 · 7 posts · 4 votes
      1y

      @Terrance Hill  wow that was great advice. Thank you so very much. I would love to talk with you more just to  learn from you if you don't mind talking with me. 

      0Reply
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