HELOC, DTI & Personal Credit

[Sean McCarroll]

I invested in a multifamily (4 unit) home as my first home purchase back in 2014. I renovated the place and with market appreciation I have some serious equity in the property (almost $300,000). I'm looking to take out a HELOC so that I can continue to purchase rental properties with the intention of drawing the cash for the downpayment & upgrades of new properties (using a portfolio loan to carry the balance). I would then refinance the rental to get the funds to pay off the HELOC.

Understanding that this process takes time, I know I will be increasing my debt to income ratio. This ordinarily wouldn't be a problem since the portfolio loans would work through an LLC, however my fiance and I are looking to purchase a single family home for ourselves within the next year. I don't know that she would qualify for the best mortgage rates on her own, which means I would need to co-apply. Would having an outstanding balance on the HELOC completely ruin our collective DTI when going to apply for the traditional mortgage? And if so, are there better options for either utilizing my home's equity for expansion and/or obtaining a mortgage once I've tapped into that equity?