Can I use a personal line of credit as my down payment to HML?

[Justin Nahas]

Hello Everyone,

I hope everyone is doing well!

I am wondering if I can or if it is smart to have an unsecured personal line of credit and use that as my down payment when I use HML to fund real estate deals. Essentially, that would be my "private lender" instead of me putting up the cash or finding another private lender to lend me the down payment and other costs.

I have the credit score, income qualification, and no debt, so I think I can qualify for one!

Do you think it's a good idea? 

[Michael Glist]

The thing you will want to be careful with is how the unsecured line of credit will affect your credit if you are using a HML that has a score minimum. Most lenders will want to see a bank statement to show funds available for closing which means you will need those funds in the account shortly after applying but also making sure that you do not take out to much that it lowers your score below the lenders minimum score requirement. It is a great way to get started just make sure you do it right or you may end up with the cash needed to do the deal but not the credit score needed.