A Heloc typically requires a higher Fico when it comes to obtaining it on both Primary and Investment. A cash out refinance is the better choice for multiple reasons especially since you can pay off your debts in the refinance to help lower DTI. When you say your credit score took a hit or is low do you mean under 680?
If your Fico scores are under 680 getting a heloc will be close to impossible especially on an investment property. Typically banks/lender use your middle score out of the (3) scores to qualify. So if you had a 720, 650, 720 they use the middle or (720) to qualify. Some banks only use one bureau like Transunion or Equifax and whatever that score is they will use to qualify.
My advice is to look into a cash out refinance first before you apply for the Heloc so you can pay off debts through the refinance process.
Another option would be a personal loan where the bank pays off your debts by consolidating them to help you free up your DTI. That may take 3-6 month to increse teh scores back up but there are some tricks to speed up the process.
A Heloc typically requires a higher Fico when it comes to obtaining it on both Primary and Investment. A cash out refinance is the better choice for multiple reasons especially since you can pay off your debts in the refinance to help lower DTI. When you say your credit score took a hit or is low do you mean under 680?
If your Fico scores are under 680 getting a heloc will be close to impossible especially on an investment property. Typically banks/lender use your middle score out of the (3) scores to qualify. So if you had a 720, 650, 720 they use the middle or (720) to qualify. Some banks only use one bureau like Transunion or Equifax and whatever that score is they will use to qualify.
My advice is to look into a cash out refinance first before you apply for the Heloc so you can pay off debts through the refinance process.
Another option would be a personal loan where the bank pays off your debts by consolidating them to help you free up your DTI. That may take 3-6 month to increse teh scores back up but there are some tricks to speed up the process.
@Jason Wray, that is such a good set of recommendations. It is such a challenge to get credit once the DTI is at the max. My thought is to use unsecured personal loan to take the credit card obligations. HELOC on primary is another thought. Better to have HELOC before it is needed than after. Have been there with high DTI, too, and it stinks.
Yes, maximizing your credit cards can affect your HELOC in amount and terms or even get it because it have an impact on your FICO. That way I love business credit cards because they have no effect on your personal FICO even if you maximize your business CC. You can do a balance transfer with some cards in 0% APR.