Unlike a typical HELOC, the product does not look at the borrower’s income. Endter said that is the part many investors don’t know.
“I don’t need you to be working,” Endter said. “I don’t need you to have a million-dollar job. I don’t need you to be worried about your debt-to-income or the fact that you have 10 cars financed under your personal name. I just need to make sure that you have the qualifying credit and your house rents.”
Endter gave an example of how the math would work. A rental that brings in $3,000 a month, with $2,000 going to principal, interest, taxes, insurance, and HOA dues on the first mortgage, can take on a $1,000 monthly payment on the second and still hit a 1-to-1 ratio. The new and old payments together can equal the rent, and no more.
“There are so many people who are actually sitting on so much equity, and there are properties that cash flow, whether it’s short-term rental or long-term rental, and they can access their equity,” Endter said.
Investors, she said, tend to ask a short list of questions that don’t involve the mortgage rate.
