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HLOC

socalchef00
Contributor

HLOC

Hey Gang,

 

So I'm looking to pull out a HLOC on my house and take advantage of the equity before markets dip. Owe $88k, Value $350k

 

My question is, there is about a 70% chance I'd be moving and purchasing another home in 4-6 months.

Would pulling this HLOC as a just in case we dont move hurt any potential in qualifying for the new mortgage?

 

There is a chance that I would have to use the sale of this home to purchase the new home so I'll need to do the contigency upon sale and have the funds transferred in escrow.


TransUnion FicoScore 8 : 815 | EquiFax FicoScore 9 : 794 | Experian FicoScore 8 : 792
Total Credit Limit Of : $342,750 | Avg Cr Age : 6 Yrs., Oldest card : 17 years, Youngest card : 1 Year
Message 1 of 5
4 REPLIES 4
dragontears
Senior Contributor

Re: HLOC


@socalchef00 wrote:

Hey Gang,

 

So I'm looking to pull out a HLOC on my house and take advantage of the equity before markets dip. Owe $88k, Value $350k

 

My question is, there is about a 70% chance I'd be moving and purchasing another home in 4-6 months.

Would pulling this HLOC as a just in case we dont move hurt any potential in qualifying for the new mortgage?

 

There is a chance that I would have to use the sale of this home to purchase the new home so I'll need to do the contigency upon sale and have the funds transferred in escrow.


Be aware that many HELOC have an early termination fee if you have it open for such a short time, so check with the lender you are looking at what their requirements are. 

The only way the new HELOC would affect the purchase of a new place is if it lowers your scores too much, assuming you have to sell the property with the HELOC on it. 

If you kept the property the HELOC would count against your DTI. 

Message 2 of 5
socalchef00
Contributor

Re: HLOC


@dragontears wrote:

@socalchef00 wrote:

Hey Gang,

 

So I'm looking to pull out a HLOC on my house and take advantage of the equity before markets dip. Owe $88k, Value $350k

 

My question is, there is about a 70% chance I'd be moving and purchasing another home in 4-6 months.

Would pulling this HLOC as a just in case we dont move hurt any potential in qualifying for the new mortgage?

 

There is a chance that I would have to use the sale of this home to purchase the new home so I'll need to do the contigency upon sale and have the funds transferred in escrow.


Be aware that many HELOC have an early termination fee if you have it open for such a short time, so check with the lender you are looking at what their requirements are. 

The only way the new HELOC would affect the purchase of a new place is if it lowers your scores too much, assuming you have to sell the property with the HELOC on it. 

If you kept the property the HELOC would count against your DTI. 


Wouldn't it only lower the score / counta against the DTI if I pulled money on it?

If I get the HELOC, but don't pull on it, shouldn't it raise my overall credit to income and not affect the DTI as long as I don't pull on it?


TransUnion FicoScore 8 : 815 | EquiFax FicoScore 9 : 794 | Experian FicoScore 8 : 792
Total Credit Limit Of : $342,750 | Avg Cr Age : 6 Yrs., Oldest card : 17 years, Youngest card : 1 Year
Message 3 of 5
dragontears
Senior Contributor

Re: HLOC


@socalchef00 wrote:

@dragontears wrote:

@socalchef00 wrote:

Hey Gang,

 

So I'm looking to pull out a HLOC on my house and take advantage of the equity before markets dip. Owe $88k, Value $350k

 

My question is, there is about a 70% chance I'd be moving and purchasing another home in 4-6 months.

Would pulling this HLOC as a just in case we dont move hurt any potential in qualifying for the new mortgage?

 

There is a chance that I would have to use the sale of this home to purchase the new home so I'll need to do the contigency upon sale and have the funds transferred in escrow.


Be aware that many HELOC have an early termination fee if you have it open for such a short time, so check with the lender you are looking at what their requirements are. 

The only way the new HELOC would affect the purchase of a new place is if it lowers your scores too much, assuming you have to sell the property with the HELOC on it. 

If you kept the property the HELOC would count against your DTI. 


Wouldn't it only lower the score / counta against the DTI if I pulled money on it?

If I get the HELOC, but don't pull on it, shouldn't it raise my overall credit to income and not affect the DTI as long as I don't pull on it?


The account itself might lower your scores. 

You are correct that only if you use it will there be a payment that goes against your DTI. 

FYI credit to income is not used for anything so it doesn't matter. 

Message 4 of 5
socalchef00
Contributor

Re: HLOC


@dragontears wrote:

@socalchef00 wrote:

@dragontears wrote:

@socalchef00 wrote:

Hey Gang,

 

So I'm looking to pull out a HLOC on my house and take advantage of the equity before markets dip. Owe $88k, Value $350k

 

My question is, there is about a 70% chance I'd be moving and purchasing another home in 4-6 months.

Would pulling this HLOC as a just in case we dont move hurt any potential in qualifying for the new mortgage?

 

There is a chance that I would have to use the sale of this home to purchase the new home so I'll need to do the contigency upon sale and have the funds transferred in escrow.


Be aware that many HELOC have an early termination fee if you have it open for such a short time, so check with the lender you are looking at what their requirements are. 

The only way the new HELOC would affect the purchase of a new place is if it lowers your scores too much, assuming you have to sell the property with the HELOC on it. 

If you kept the property the HELOC would count against your DTI. 


Wouldn't it only lower the score / counta against the DTI if I pulled money on it?

If I get the HELOC, but don't pull on it, shouldn't it raise my overall credit to income and not affect the DTI as long as I don't pull on it?


The account itself might lower your scores. 

You are correct that only if you use it will there be a payment that goes against your DTI. 

FYI credit to income is not used for anything so it doesn't matter. 


Thanks


TransUnion FicoScore 8 : 815 | EquiFax FicoScore 9 : 794 | Experian FicoScore 8 : 792
Total Credit Limit Of : $342,750 | Avg Cr Age : 6 Yrs., Oldest card : 17 years, Youngest card : 1 Year
Message 5 of 5
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