cancel
Showing results for 
Search instead for 
Did you mean: 

HELOC questions.

tag
awp317
Frequent Contributor

HELOC questions.

So I just opened a heloc against a rental property for 250k. I opened it for 2 reasons, one the interest rate is crazy low 2.75% and also to have in emergencies. So Its 99% of the time going to be dormant, or used to as a quick source of money then paid off. But I see people making threads about if its maxed out that it appears as a maxed out CC. But is the same true for not being used? Also will it have the negitive effect that CR companies wont like extending more credit because they see a 250k line? Or is it some how catoriged differently there? thanks! 

Amex Platinum NPSL I Chase Sapphire Reserve 78K I Chase Freedom U 55k I JP Morgan Ritz 50k I B OF A Cash Rewards 50k I Barclay Black Luxury 43,750 I Capital One QuickSilver 40K I Amex BCP 34k I Amex Optima Platinum 30k I Barclays Arrival+ World E 29k I Merril+ 27,800 I Lowes 25k I Pen Fed PR Visa Sig 20K I Home Depot 17k I NFCU Cash Rewards 8k

Amex Biz Platinum NPSL I Lowes Business 42k I Amex Simply Cash + $22,500 I Chase Ink 21K I B of A World Points $20,500 I B of A Bus MasterCard 16k I Amex SPG 3K.
Message 1 of 6
5 REPLIES 5
user5387
Valued Contributor

Re: HELOC questions.

First thing I'd suggest doing is tying down whether it's going to report as revolving, installment, or some combination.

 

There are a bunch of threads here that discuss the point.  For example, you can do this Google search:

 

   site:myfico.com heloc revolving installment

 

I believe that higher limit HELOCs tend to report as installment, but I'd suggest reading through the threads to catch the various nuances.

 

Message 2 of 6
JustinS
Regular Contributor

Re: HELOC questions.

In my own experience thus far with my HELOC it reports and gets factored into revolving credit on EX however EQ and TU both see it as a mortgage type account (for whatever reason EX scores it wrong imo because it's secured by the house thus should be a mortgage and not a true revolving account like how CC's are treated).

Message 3 of 6
Revelate
Moderator Emeritus

Re: HELOC questions.


@JustinS wrote:

In my own experience thus far with my HELOC it reports and gets factored into revolving credit on EX however EQ and TU both see it as a mortgage type account (for whatever reason EX scores it wrong imo because it's secured by the house thus should be a mortgage and not a true revolving account like how CC's are treated).


Hmm, typically it's by loan type: if it's a warehouse type line which goes up or down as you use it, it's revolving: if it's a fixed loan which you're paying back in chunks, it's installment.  

 

LOC's including HELOC's should be revolving by that measurement, but I think where this breaks down is HELOC's are traditionally used for a big purchase / debt refinance / rennovations / whatever, and then typically a person just makes regular payments against the tradeline... not certain really how lenders determine it to be reported as one or the other but I don't think that the asset which secures it necessitates it be one or the other.




        
Message 4 of 6
awp317
Frequent Contributor

Re: HELOC questions.

Sounds like I just have to wait and see, looking back at other threads the consensus is that "usually" an over 50k line gets classified as an installment. IM just worried that having a new mortgage, and opening this line of credit are going to make the credit companies freak out and start slashing limits. 

 

Its an intererest only line for minimum payment also if that makes any difference. Also it was done in my company name with me as a personal gaurentee. 

Amex Platinum NPSL I Chase Sapphire Reserve 78K I Chase Freedom U 55k I JP Morgan Ritz 50k I B OF A Cash Rewards 50k I Barclay Black Luxury 43,750 I Capital One QuickSilver 40K I Amex BCP 34k I Amex Optima Platinum 30k I Barclays Arrival+ World E 29k I Merril+ 27,800 I Lowes 25k I Pen Fed PR Visa Sig 20K I Home Depot 17k I NFCU Cash Rewards 8k

Amex Biz Platinum NPSL I Lowes Business 42k I Amex Simply Cash + $22,500 I Chase Ink 21K I B of A World Points $20,500 I B of A Bus MasterCard 16k I Amex SPG 3K.
Message 5 of 6
user5387
Valued Contributor

Re: HELOC questions.

I doubt that there will be trouble, since you have a thick file and pretty good scores.

 

But I'd watch closely to see how it reports.

 

It seems unlikely that it would report as revolving.  If it did, it would dominate any revolving utilization calculations, which is probably a good thing.

 

I'd also look at the DTI angle, just in case payments for an unused HELOC magically start to show up in DTI calculations.

 

If you got the HELOC in a business context, it's always possible that it won't report to personal at all.  My business CCs don't show up on personal.

 

Message 6 of 6
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.