I am trying to leverage my home's equity to access investment funds but I've run into a road block. I have tier 1 credit and according to the bank there's roughly $140,000 in equity in my home, but my debt to income ratio is not sufficient. I am the sole owner of our house. My partner didn't have good credit at the time of purchase so her income isn't a factor for the HELOC because she isn't on the mortgage or the deed.
Has anyone run into this same issue? Did you find a lender that would work with you?
Assuming my alternative options would be:
- Refinancing with here on the loan? Interested rates are too high right now, though.
- Would pivoting to hard money lending make more sense for my current situation? I was hoping to secure investments through auction instead of fixer-upper types via this method of funding.
- Make more money
I guess I'm just a little confused because this type of funding is backed by an asset and not unsecured. Furthermore, if I am understanding things correctly, RE investors use the equity in their properties to scale/secure more investments, right? If they are able to rinse and repeat this type of strategy to leverage equity in a property to secure another, is it because they don't have a traditional mortgage loan on the properties they purchase?
Any insite/advice would be helpful. Thank you in advance!
