Hey…me and my wife are looking to purchase our first investment property. We have a potential tenant…
Thing is my credit score is 638….mortgage lender is wanting 25%down and 15 year loan to keep rates down.
Only way we can do that is to do a home equity line of credit….would it be worth it?
It is worth getting HELOC to purchase a rental property?
About the author
Jana Christo is a business owner, real estate investor, and property manager. She has 16 years of experience in most areas of real estate.
During the last recession, she was also the managing partner for a company that bought and rehabbed properties from the court foreclosure auctions. Today, she manages her own portfolio of rental properties and shares her experience on Rentce.com.
Lenders are not lending to first time investors in this environment. I talked to 3 different lenders to get an idea of the new lending environment. They are all looking for more cash reserves, and they want to see deals that are clearly, nothing risky.
It can be but I would be careful, especially going into an uncertain next 12 months. You’d have to run the numbers, including the cost of HELOC and the cost of the mortgage against the income and expenses.
Here is a rental calculator that can help.
https://www.rentce.com/rental-property-calculator/