All Forum Posts by: Chris Porter

 Thanks!

Hello everyone.

Does anyone have a recommendation for a quality cleaning crew/company for a short term rental in Branson?

Any help is greatly appreciated!

@Nick Velez  I suppose DSCRs are difficult or not possible for new builds?  At least the complex this unit was built in includes similar properties with a 2-3 history.  I guess the trick is finding a bank that will actually consider that. 

Have become very frustrated trying to obtain financing on a second home (will also use as a short term rental). I thought a HELOC was a common way to obtain equity from your primary home and use as a down payment for a second home. But as soon as you do that, the minimum payment you have to make on the HELOC becomes a liability in your debt-to-income ratio. And this liability is throwing my DTI way out of whack and I can't get approved for financing.

For my scenario (not the exact numbers but close), I have $200,000 in equity from my primary home and available to me through my HELOC. I need that $200,000 as a 20% down payment for a second home. The minimum monthly payment on my HELOC is 1.25%, so I will be required to pay $2500 monthly on the HELOC once $200,000 is drawn out of it. But banks then consider that $2500 as a liability when calculating my DTI. So my equity asset derails financing because it also becomes a liability pushing my DTI well past 43%.

My HELOC interest rate is 4.2% meaning I pay $700 interest on the HELOC, but have to pay a minimum payment of $2500. I'm just starting the 10-year draw period. I could draw back ($2500 payment - $700 interest) = $1800 back out if I wanted to. But banks don't consider that. To them the HELOC is nota $700 liability, but instead a $2500 monthly liability.

I've read a lot of material that always references HELOCs as being good to get the equity out of your house and finance a second home. My experience is the exact opposite. It's as much if not more a hindrance than a help to the process. To me, now it seems a cash-out refinance is the only way. Where am I wrong ? After going through the process of setting up the HELOC (including all the fees), I can't stomach going through yet another process (and additional fees) to get a cash-out refinance. Not to mention I don't want a new mortgage on my primary home and extend the term out beyond what's left on it now. I've never read of such as experience with using a HELOC for financing a second home. I thought I was doing it the right way.

Very frustrated to say the least.