My wife and I have the opportunity to keep our current home and rent it out while we purchase a new primary residence. Keeping our current home and converting it to a rental would be our 4th rental. It'd cash flow about $300 month. It has 12 years left on a 15 year mortgage.

In order to do this I'd have to take a 30 year loan on the new residence. I'd prefer 10 year loan but I'd be willing to do 30 year if it enabled us to have another rental.

In order to convert current home into rental and to come in under 50% DTI, I'd have to take out an interest only HELOC on our current home and consolidate $50k of consumer debt into it.

We haven't owned our other 3 rentals long enough for the rental income to show up in our DTI calc. So only the loans show up. That's why DTI is so high right now.

This big of an interest only HELOC scares the crap out of me. The balance would actually be $180k broken down and was/will be used for the following:

25k - down payment on previous rental acquisition

25k - refurbish our home - already spent

50k - consumer debt (both cars and $15k in CC debt)

80k - new primary residence down payment

We'd actually cash flow $1,000 more a month with consolidating debt.

Is interest only HELOC worth it? Even though I don't have the answer for it now, I figured in a couple years I'd have a solution/better idea how to wipe out HELOC.

Is it worth taking out this big of interest only HELOC to obtain another rental at this time?

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Consolidate consumer debt into HELOC to lower DTI?

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