Broker says no to using HELOC $$$ for downpayment!
Wondering if you guys can help me out again?
I asked and got great answers to a previous question, see my other thread on HELOCs / Mortgages and Tax deduction - http://www.redflagdeals.com/forums/show ... p?t=632012
I want to pick up a rental property, I have the 5% downpayment and I want to pull another 15% from my HELOC - so I can avoid paying mortgage insurance.
I spoke to my broker and she told me that I couldn't take money from my HELOC to use as a downpayment. She said I needed to prove that any money I use for my downpayment was from my savings account or comes from a family member.
I could borrow money from a family member (even though I'd have to say it was a gift), but I want a proper paper trail for tax purposes. I want to be able to fully account for the interest on the downpayment as well as the interest on my mortgage.
I own my own home free and clear, I don't have another mortgage and my credit card debt is minimal and fixed at 2% APR for a whole year.
So is this kind of refusal normal? My understanding is that it's supposed to be easy to use your HELOC in these circumstances. Should I be looking for another broker or am I missing something?
Thank you again.