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Updated almost 4 years ago on . Most recent reply

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Julie Tran
  • Real Estate Agent
  • Southern California
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HELOC before applying for investment property loan?

Julie Tran
  • Real Estate Agent
  • Southern California
Posted

Hello! My husband and I are planning to buy our first investment property. We are currently refinancing to bring down our DTI. We did a pre-qual with a lender to get a rough idea. The amount is what we need for the area and type of property we're looking for. We've saved enough for 20% down, $10-$15k closing cost, 6-8 months PITI, and are still trying to save more in addition to being conservative with our numbers.

Our question is, do we apply for a HELOC before or after applying for an investment property loan? The purpose of the HELOC, on our primary, is to have it as cash reserves for worst case scenarios such as covering payments due to vacancy or if remodeling budget goes over. LTV on our primary is around 50% so the HELOC will give us more than we need. I wasn't sure which we should do first - apply for HELOC or apply for investment property loan. Does it matter? What are the pros/cons?

Thank you in advance for taking the time to read my question and help us with our concern.  Your feedback is greatly appreciated :)

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