Lending question re: HELOC/loan options

[Holly Thorsen]

Hi all! I own a home in CO which was my primary residence and now it's a rental. I'm on the deed, not the loan for the current house I live in here in GA. What would be the best loan option for purchasing another property under my name that I'll be moving into as my new primary residence? I have equity in my CO rental; I don't have a large enough sum saved up for a down payment yet so I'm wondering if a HELOC would be an option on my CO property. I'm sure more questions need to be answered but thought I'd start here first. Thanks!

[Jeff Roth]

Quote from @Adedotun Kembi:

Quote from @Jeff Roth:

Hi Holly from Georgia-

You own a rental in Colorado and you are looking to purchase a new primary residence and possibly use the equity in the rental for the downpayment.

You have two options I am aware of with the rental to access the equity:

1. You can work with a local credit union that does HELOCs, Home Equity Lines of Credit or Loans, on investment property. Most will not do 100% loan-to-value so plan on something less than that for the loan amount.

2. You can do a cash out refinance and pull equity out that way. Look into a DSCR, Debt Service Coverage Ratio, loan where the rental income can be used to qualify the cash out refinance instead of your personal income.

To Your Success!

Sorry to jump on the back of this original post but I have a follow-up question to this response. Most credit unions I've seen won't do a HELOC on an investment property. Can you please provide the names of those that will do one? Thank you very much in advance.

Try the University of Michigan Credit Union. They will do one investment property. Not sure how far regionally they lend to but that is one in my area that will do investment property.