I have a couple questions about REI in relation to the topic. I own my house free and clear and was just approved for a HELOC. The plan is to move out of the current home and house hack using my VA Loan. Then, I'd use the HELOC to purchase others using conventional loan(s). I'm closing soon on the HELOC and I don't have the pre-approval for the VA loan.
How would the HELOC affect the VA Loan? Will the full value of the HELOC be included in my DTI?
The answers will determine my next move so, thanks in advance for any feeedback.
@Jabari Jones , my question is: would the (future) rent coming in from your current home cover the the HELOC repayments (and other property expenses) once you draw out the full amount?
ie. Don't include the income that you'd be hoping to get out of the HELOC.
If the answer is yes, then that means your DTI should not be unduly affected.
Then, the added income from wisely investing your HELOC would be the bonus!
[But, if the answer is no, then that HELOC will likely adversely affect your DTI!]
Sounds like a plan. Thank you for your service. All the best...
The HELOC will not impact your DTI until you draw from it. It is like a credit card in that, if you have a zero balance then it does not count against you. Once you take money out, though, or even if you plan to use the HELOC for a down payment, then the lender will factor what your payment to the HELOC will be in determining your DTI.
@Edward B. @Brent Coombs Thanks for clearing that up. I spoke with my lender today and she confirmed. With that, I'll be looking to get my pre approval on my VA Loan and moving forward in this journey! Thanks again!!
Time for someone like you to kick that VA loan to the curb!
Forget about VA and all that VA Funding Fee cost and regulations BS! That loan is for 1st time buyers anyway, you are past that stage.
PLUS, regardless of how patriotic sellers are, their listing agents will usually try to avoid contracting with a Vet using VA over a buyer using a Fannie Mae purchase loan for multiple reasons.
Go head and Max that HELOC approval on that free and clear property to the highest LTV possible. I don't care if its a .500 or 1.00% higher in rate to get to 90%, get approved for MAX ltv.
Then, on the next purchase of a primary or 2nd home, take 10% from your HELOC and for an 80/10/10 on the purchase using another purchase money 2nd.
Basically it 100% No PMI financing, better than a VA loan.
@Steve McRory Depends man. If he has service connected disability the VA Funding Fee is waived, it has lower rates than conventional, and if you do an 80/10/10 you lose leverage with the HELOC. VA Loans are NOT just for first time buyers - they are for owner occupants. So, you can house hack as long as it is feasible that you can owner occupy. You can have more than one VA at once, and you can use it multiple times. @Alejandro Calixto - If you DONT have VA disability you should apply for it. 10% or more waives your VA funding fee forever and makes the VA loan the best, period. Save that HELOC for when you NEED it - like for non-owner purchases. Use your VA to buy a multi-unit - live in one unit and rent out the rest. Get some equity, refinance it to a conventional, and go do it again.
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