HELOCs and Loans - How to get both without damaging my credit

[Ben Jamin]

Hi All,

I'm considering a HELOC to help with a small portion of a down payment on a property. However, if I do move forward and take out a HELOC and then turnaround a week later and apply for a mortgage loan, won't I get denied, since I just took out the HELOC?

Cheers,

[Tristan Pearrow]

Also, HELOCS usually have prepayment penalties, so paying them off early over and over could get expensive. 

You'd also be incurring 3 sets of closing costs for one transaction - the HELOC, the refinance, and the purchase which would get expensive as well.

A better way to access capital might be to do one or two refinances on properties with the most equity/no mortgage at all. That would cut down on how many transactions are being done, and the funds from the cash-outs could be used strategically to buy multiple properties rather than needing a new 3-loan process for each one.