How to apply for HELOC

[Kofi Thompson]

Team

i know this may seem like a simple question but how do you apply for a HELOC your first home that is now a rental property while living in your second home which is now your primary.

i just applied for BOA and was denied unexpectedly with an above 700 credit etc. 

What's the best way or place to apply for approval? 

[Doug Smith]

I worked in banking for about half of my 32 years in lending and I've got old co-workers that have spread out to the wind. Almost all of them are in commercial now (bankers progress that direction), but none of them...and I mean none of them...could get a retail branch banker to help me when my wife and I decided to put a HELOC in place. At the time, we were banking with a larger national bank and the branch staffs were basically so incredibly incompetent that none of them even knew how to go about taking the application. I am not making this up. When I was a branch baker in my late 20s, I make a living off of HELOCs. Now, to on in the office can tie their shoes. I had to go to my bank's on-line site and figure out how to manually do my own application. I ended up closing it with the 800 number. Thank goodness I make loans for a living and knew what to provide them. They were lost.

Most of the Conventional, FHA, VA and USDA lending we do goes through our loan officers while I handle the real estate investor loans. I had outlawed HELOCs because I assumed banks were like they were when I worked there. Sadly, that's no longer the case. We added them after my experience at the bank. If someone like me struggles to find one, I can only imagine your struggle. Couple that with the fact that HELOCs are "open-ended" where, even if you aren't carring a balance, the bank has to account for the fact that you could walk in at any time and draw upon the line. Most people don't take that into account when they have a low balance in a line of credit, but banks have to think about stuff like that. That's why they prefer closed-ended installment loans.

Although we're national with our other investor products, I can only do HELOCs in FL otherwise I would offer to help, but of the investor 2nd position HELOCs I know of, they only go to 70% LTV max. They are also now very tech-driven, meaning that humans don't really touch the underwriting. Unlike a DSCR deal, they will likey require income documenation that, if complex, the computer undewriting systems may not be able to recognize or verify...particularly for higher line requests.

I wish I had a better answer for you, but banks no longer love HELOCs. If you strike out, PM me and I can reach out to try to at least hook you up with someone in your state. It may not be perfect, but it's an option.