Mortgage Loans

[mlwcfp]

On a recent credit report, any idea why a primary mortgage on investment property (a rental home) would be classified as "revolving credit" on the credit report? Do you think re-classifying the rental mortgage as "real estate debt" would raise the FICO score? If it is possible to get the rental mortgage reclassified, any suggestions about how to do that?

Thanks in advance for any info!

[llecs]

Was this purchased via a HELOC or similar arrangement, as opposed to a conventional loan?

What is the balance now (very roughly)?

[mlwcfp]

It was purchased originally with a conventional loan, but now also has a HELOC on it. The current market value is about $610,000 with total debt (1st mortgage and HELOC) of about $446,000 currently.

[emptypockets]

I don't know if it is possible to reclassify it. But I will say that doing so may (or may not) improve your credit score. I have a mortgage on my home, and one on a rental property. On my EX report, one of the reasons they give for my score not being higher is too many mortgage/installment loans.

[mlwcfp]

Interesting--just the reverse in this case. The reason EX score isn't higher is because there is "too much" revolving debt. So my thought was to get the rental property mortgage reclassified as "real estate debt" and thus possibly improve the score.

[llecs]

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mlwcfp wrote:

Interesting--just the reverse in this case. The reason EX score isn't higher is because there is "too much" revolving debt. So my thought was to get the rental property mortgage reclassified as "real estate debt" and thus possibly improve the score.

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If you pulled from a service that offers an EX score, then ignore the score and advice as neither would be FICO-related. Experian blocked access to your FICO some time back. I mention that because FICO does score HELOCs as a revolving, but only to a certain limit. In your case, your account is viewed as an installment loan by FICO. Having anything changed won't impact your FICO.