All Forum Posts by: Nathan Ditoto

This is in Virginia. I guess the part I'm struggling to wrap my head around is several people have said the cash out refi will "look better" but haven't explained why. Variable rate on HELOC changing DTI ratio?

I have been speaking with several lenders and each seems to have a different opinion. My goal is to access the equity I have in my private residence to add to my cash reserves in order to use this money to invest. Selling/renting is not an option I want to consider right now. One lender is suggesting a HELOC so that I can stick with my current healthy mortgage which is 3% and only has 19 years left on the term. The other is saying a cash out refinance is better (current rates ~6%, new 30 year) because it will look better to lenders for future loans based on not having a variable rate and also suggests that appraisals come in lower for HELOCs versus cash out refi, thus lowering the amount of cash I will have access to. I'm leaning towards the HELOC. I know there's a difference between thinking like a homeowner and thinking like an investor but I can't shake the feeling that increasing my mortgage term 11 years, increasing payment almost $400, and essentially wiping out the amount of my payment going towards principle is a bad strategy but I'm hung up on the suggestion that a HELOC will look less desirable to lenders looking at my DTI and cash reserves for future loans. Thoughts?