HELOC - Mortgage process

[Bryan Miller]

Main question: how do HELOCs affect your dti and how much does it change how much a lender will allow you to borrow?

Fairly new investor here, working on first purchase of a property to use as STR, and hoping I didn't get the cart before the horse. Here's my situation: I'm buying in a very hot market, so knowing it would take a few tries to get an accepted offer….I've been working on getting a HELOC at the same time I was offering on houses (we have a lender and a pre approval budget). After 4 tries…ours was accepted and we are under contract, closing early December! We close on our HELOC this week, early November.

At the time of our pre approval, the HELOC wouldn't have shown up because we hadn't finished the appraisal and didn't know if it was going to be a great option for us yet, so we didn't think to mention it to the lender. Not on purpose, we just sent everything they asked and got the letter. Easy Peasy. Long story short…..I'm just nervous the lender will now be like, what the heck, you have a much higher credit capacity and we don't want to give you the amount from the approval amount. Kind of like buying a car in the middle of buying a house. Is it the same thing? In my mind, we have no additional balances, no new debt. The HELOC will only be used for our down payment and closing costs, so it's not like I'm wracking up anything beforehand. Can someone give me some insight? Did I screw up?