Pre-approval and then HELOC? Or other way around?

[Richard Anderson]

Howdy,

If anyone wouldn't mind sharing, I have a question about financing. My wife and I are planning on buy-and-hold and are trying to figure out the best way to start the ball rolling in regards to finances. We have a decent amount of equity in our house. With that said, I am wondering if we should focus on getting pre-approved for a mortgage first for our rental purchase, and then secure a HELOC on our residence? The HELOC would be used towards the down payment and any repairs on the property. Or should we acquire the HELOC first and then see where we stand towards getting a mortgage.

I have my thoughts, but would love to hear what others think.

Thank you!

[Kevin Siedlecki]

@Richard Anderson - I would advise getting the HELOC first, because the HELOC is going to change your DTI. If you get the pre-approval first, then the HELOC, the pre-approval won't be valid anymore, because your HELOC changes a lot of what they'll be looking for to approve you.