Borrowing money. What order should I tackle each of these steps?

Question

I plan on getting pre-approved for a loan for a multifamily rental purchase. I also want to open a line of credit in case of an emergency (since I don't have a lot of capital yet.) I also would like to refinance my home for a better interest rate.

I'm trying to strategize on what to do first. That is a lot of hard inquiries on my credit score and I'm trying to be tactful with this.

I was going to get the handiline first in October and then wait 7 months to get preapproved (since it takes that long to have a hard inquiry removed from your credit history). But then I also thought that it might be a good idea to refinance my current home to save on some interest there before rates go up.

What do you suggest the order should be?

Chris Mason · Answer

Order of operations:

1) Refinance current house. Which you should do anyways given the current rates (low) and the general trend for the last week (rising).

2) HELOC.

3) Preapproval.

If you go 2 before 1, the refi will have worse interest rate pricing. If you go 3 before 2, the HELOC down payment funds can't be considered.

FICO doesn't treat mortgage inquiries the same as credit card inquiries. Don't stress too much about that.

Borrowing money. What order should I tackle each of these steps?

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