do lenders differentiate when using a HELOC???

[Jose Vazquez]

hey :wave: ...newbie here. maybe this has already been asked but I wanted to know if others have run into this before. Do lenders view you different depending on what you are using the HELOC for? for example, someone who wants a new kitchen for their primary, vs someone who wants to use the heloc for a downpayment on an investment property.

thanks!

- Jose

[Kerry Baird]

@Jose Vazquez, I think people are answering two different questions.  

One question that is being answered is: Will I be approved for a HELOC if I tell the bank that I am using the money for investments vs improvements?

The other questions is: I have money from a HELOC and want to use it as a down payment for a future property; will the lender accept HELOC funds for the new purchase.

HELOCs are not regulated the same as mortgages. Different lenders have different appetites for HELOCs, some will make them on primary residences only, some will do first position while some will not (meaning on a paid off house). Some lenders have a short repayment period (such as 10 years) while others have a long repayment period (such as 20 year draw, 30 year repayment). One I am aware of has you draw the entire amount up front, and then return what you don't want to use (Figure). Others allow you to use the HELOC as a checking account, so you can use Velocity Banking. These are all over the map.