Does having a HELOC affect DTI or Credit?

[Daniel DeSurra]

I'm considering pulling out an 80% HELOC on my primary residence to invest using the BRRRR strategy. Would doing so negatively affect my DTI or credit and make it harder to qualify for a conventional loan when refinancing? I currently only have 3 rentals so I'd prefer a conventional loan. I've heard financing gets a little tighter after 3.

Thanks for any advice you might share!

I'm also looking for a recommendation on HELOC lenders.

[Kyle J.]

@Daniel DeSurra When it comes to your DTI, if there's a balance on the HELOC, a lender will obviously have to factor that into your DTI calculation (unless you're doing a refi and the refi would be to payoff that balance). If there's no balance on your HELOC then it won't have any effect on your DTI.

As for your credit, I opened two HELOCs and it didn't negatively affect my credit score at all.

One of my HELOC's is through Union Bank and I believe they're in your neck of the woods. But you should call around to find the lender that will work best for you. Here's some questions you can ask when calling around: What You Need to Know When Shopping for a HELOC.

Good luck!