HELOC providers in Texas

[Amit Gupta]

Hello, 

I am looking for heloc on my rental in Houston, texas, any recommendations? Somehow not able to find a lender providing HELOC in texas, other states seems to be fine.

-Amit

[Costin I.]

@Amit Gupta - if you are looking for a Home Equity Line of Credit on a rental/investment property, there is no such thing in Texas, stop looking for it - or more precise, stop asking for it residential lenders and "regular" mortgage providers.

Why? Because they don't realize you are actually looking for an Asset Based Line of Credit or Portfolio Line of Credit, which is a commercial product (and you need to talk with a commercial lending officer), and they don't even know/want to redirect you to their commercial lending colleagues. They will simply tell you "no can do". You just need to ask the right person for the right product at a bank.

Other points:

1. Do not confuse HELOC (home equity line of credit) with HEL (home equity loan) - one is a "reusable" product, the other is a one time deal. One you get charged interest on the balance when used, the other you get charged interest on the whole balance from the moment you get it. One you can pay it down and reuse, the other you pay it down and gets closed.

2. There is no HELOC for an investment property. But you can get same thing, a line of credit (LOC) or portfolio LOC or asset based LOC - you just need to find the right bank and the right person in the bank who knows about this type of product (usually a commercial banker). Don't bother to ask a residential loan officer about HELOC on a rental, they will tell you "impossible" and not even know of alternatives.

Again: You can get an LOC on your rentals by asking a commercial lender about asset based LOC or portfolio LOC. A residential loan officer doesn't know about this product. We do have one LOC secured by two rentals that we use to make cash offers on properties we rehab, lease, refinance in fixed long term loan and repeat the process.

3. Shop around - the differences in LTV/LTC, fees, renewal fees, periods, terms, rates, closing, documentation required, etc. are substantial from bank to bank. You can see below a comparative sheet I used to bring them to an apple-to-apple comparison when I was looking for something like this 3 years ago.

4. You can get a portfolio LOC from several sources - I recommend Amplify CU (and to stay away from Wells Fargo). Most likely they offer portfolio loans too, that is an easier option to get usually. Watch out for steering you into a refinance loan or equity loan - those are not reusable products.