Please excuse this question if it's been posted before in the past. I own a condo that I have approx 40K in HELOC money if I need it. I'm considering renting it out and using the HELOC money to pay toward the PMI for a second home.. can anyone see potential problem with this assuming I'll have no problems with it as a rental.. ( I'm 99 percent positive it'll rent for more than double my current mortgage on it)

If the HELOC allows for it, then the only risk is if you can not rent it or the tenant fails to pay. There is a risk to becoming a landlord, but I think you already recognized them.

I do not underwrite loans for personal residences. It is possible that the lender might count the payment on both properties against your personal income specially if the apartment is not rented, but this is something that is going to have to be asked from the actual lender.

Good luck

'If the HELOC allows for it, then the only risk is if you can not rent it or the tenant fails to pay. There is a risk to becoming a landlord, but I think you already recognized them."

This is something to definitely consider. Remember each time you have a tenant and they leave you have to follow city code to bring it back up to what the city says is "RENTABLE" . I do not structure Resi Loans, but have in the past long ago when superman was cooL! Okay bad joke. There is a way of not getting PMI on a property with out having to pay it down, or risk your current CASH position.

Depending on what state you're in... go to an aggressive bank. You have 2 options *remember PMI 80% or more (once you have pmi, they say your equity must be 78%, but that's in the details...)

1. 80% first 10% second and 10% down (this rids you of PMI with out the outlay of all that cash

2. 80% first 15% second and 5% down (which I recommend if you can find it) If you're in Northern FL I know someone who can help you.

Typically the first is an average mortgage, the second is a variable (focus on paying this off first) and the minimal 5% down well use that from your equity line. This puts you in a cash position.

Remmeber they will still count the equity line against you as if you've spent all the money. you will want to make sure that your income can sustain the debt, and you're golden!


I do not underwrite loans for personal residences.

Me either! So please confirm with your originator and they can help you. If they can't, they are too junior and go elsewhere FAST! These are the savviest of loans, and novices can't do them. They are too complicated... on the backend. That's why I recommend an Aggressive Bank...


GOOD LUCK!