All Forum Posts by: Nathan Ditoto
Nathan Ditoto has started 1 posts and replied 2 times.
Post: Future loan implications for HELOC
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Quote from @Erik Browning:
First, what state are you in?
Second, it's difficult to give you a solid answer without knowing all of the pieces of your financial profile. You'd have to weigh the risks of both and select what you can stomach.
I do want to add, getting a cashout refi right now isn't the worst idea, despite the higher rates. Rates will come back down as we enter this recession. Also, I've seen them drop this past week since we've cooled off from the FED announcement. Accessing the equity now and temporarily paying more each month is a risk you'll have to take. Use your cash out capital wisely and beat the interest rate on your primary.
Good luck
This is in Virginia. I guess the part I'm struggling to wrap my head around is several people have said the cash out refi will "look better" but haven't explained why. Variable rate on HELOC changing DTI ratio?
Post: Future loan implications for HELOC
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I have been speaking with several lenders and each seems to have a different opinion. My goal is to access the equity I have in my private residence to add to my cash reserves in order to use this money to invest. Selling/renting is not an option I want to consider right now. One lender is suggesting a HELOC so that I can stick with my current healthy mortgage which is 3% and only has 19 years left on the term. The other is saying a cash out refinance is better (current rates ~6%, new 30 year) because it will look better to lenders for future loans based on not having a variable rate and also suggests that appraisals come in lower for HELOCs versus cash out refi, thus lowering the amount of cash I will have access to. I'm leaning towards the HELOC. I know there's a difference between thinking like a homeowner and thinking like an investor but I can't shake the feeling that increasing my mortgage term 11 years, increasing payment almost $400, and essentially wiping out the amount of my payment going towards principle is a bad strategy but I'm hung up on the suggestion that a HELOC will look less desirable to lenders looking at my DTI and cash reserves for future loans. Thoughts?