Will large balance on HELOC after paydown affect credit score

[Anonymous]

I'm refinancing a jumbo mortgage and got what I though was a geat deal, but am worried about future impact on my credit scores, which now are excellent (800+). I have an $840K mortgage (70% LTV) that I am refinancing into a $417K conforming 15 year plus a $423K HELOC, that's priced at Prime minus 1/4% for 30 years, 10 yrs interest only and then a 20 year amort. I have $200K of cash that I plan to pay down right after closing, so I'll have that capacity to reborrow should I need it.  Will having a $223K balance on a $423K HELOC hurt my scores? I could also just get a $625K 15 year mortgage w a $200K HELOC that would be unused initially - it's a little more expensive and locks in higher monthly payments, but I can do that if the "large HELOC option" will have a  negative impact on my credit score. Any advise on how the agencies will look at those balances would be appreciated. Thank you,

DH

[Lel]

HELOCs with credit limits above ~$50,000 are scored as installment debt (i.e. they are effectively scored as mortgages) and are not included in the calculation of your utilization of revolving debt.  So, having a balance on a HELOC with a CL > $400k should not hurt your scores too much; you will lose a few points for the inquiry and the new account showing on your credit reports.

What would be the interest rate on your 1st mortgage?  I'm guessing that it's in the low 5% range.  Your HELOC would have an interest rate of 3% for the near term, but will increase as the economy improves and the Fed starts tightening monetary policy.  Remember, the prime rate was in the 7s less than two years ago.  It's not going to reach that level anytime soon, but it is likely that this will happen sometime in the next few years (assuming we don't stay in an economic funk).  Your interest rate on the HELOC will then be higher than your fixed rate loan.  You will have to decide which is more important to you: (1) lower current payments, knowing that your future payments will be higher (unless you pay off your HELOC completely), or (2) higher current payments but long-term stability of payments. 

[Anonymous]

The rate on the conforming first is 4.25%, w 1.625 pts - I plan on being in my house 10 yrs or so, so seems like a good deal. I agree that I'm taking on some floating rate risk, but if I've got some borrowing capacity on my HELOC I don't really have to worry about making payments, just paying a bit more. Thanks for the input.

DH