Personal line of credit and creative finance

[Ryan Keenan]

Hello BP, is there any problems with taking a personal line of credit out and seasoning it in your bank account for a few months then using it for a down payment and rehab? Example : I take 50k out on a personal line of credit.. I then take 20k of the LOC and put it in my bank account with my own personal savings of 25k. All together 45k now in my bank account plus 30k still in my line of credit. Next, let it season for a few months, then go another bank and apply for a mortgage loan planning on putting 25k for a down payment . .is this ok?

[Ned Carey]

Sure it is OK and it is perfectly legal. However banks may still pick up on it. It might cause problems it might not.