Home equity loan question

[Bridget Diaz]

My lender says you cannot take a home equity loan out on an investment property~ is that true of most lenders?  Would it be better to pay cash, then take a mortgage out on it?  Newbie here!

[Brent Coombs]

@Bridget Diaz, afaik, plenty of lenders will offer a LOC against the (borrowable) equity you have in an investment property. Even your current lender probably has a division that deals in commercial / asset-based loans. [Time to find a different Loan Officer?]

Q: What's your borrowable equity? ie. What specific % of its value will a lender lend? 

(A: Usually significantly less of a % than if you were the owner-occupier).

If you'd like to buy it with a deposit and a mortgage anyway, what's the issue?

ie. I don't see your second question as being related to your first question. 

ie. Why would a lender give you a (later) mortgage, but not a (later) LOC? Welcome to BP...