Board Topic: HELOC for Rental property in Washington state
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HELOC for Rental Property

Posted by: Dan Foster May 5 2004, 11:54 AM
I own a rental property in Washington state and would like to open a line of credit. This is not a primary residence, which seems to be a requirement for most lenders. Do you know of any lenders that offer packages for this type of situation? Thanks.

Posted by: loanuniverse May 6 2004, 07:46 AM
Dan:

Those pesky lenders can be quite insistent on the ”Home” portion of that acronym. In order to access the equity on your income producing property, you will be best served by going to a commercial lender. The lender will take a look at the rental income and the expenses associated with the property and calculate the net operating income. Using that NOI, the lender can then calculate if there is enough to pay for the line of credit debt service.

When looking at similar deals, the most important aspect that I have to look at is whether or not there is enough repayment from the rental income. That question will always have to be answered satisfactorily. Most lenders would want to know what you are going to use the money for, and how your personal credit is. However, there are degrees of flexibility depending on how aggressive the lender is. If you were looking for a specific recommendation in Washington State, I can’t help you there.


Good luck.
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