I don’t think that you will be able to purchase with a 1st & a HELOC but HELOC guidelines are up to each institution as they are lending their money with their rules. (You might)
HELOCS are usually always at an adjustable rate, tied to Prime and are no rate risk to the issuer, If prime goes up, so does your rate,
1st mortgages are underwritten with guidelines from FNMA, FHLMC, FHA or VA. Having 2nd may affect your 1st pricing
You CAN purchase with a 1st + a 2nd Home Equity LOAN.
These are typically fixed rate probably 6%+ today.
No prepay penalty.
*This option guarantees that you will be able to accomplish what you want to.
After purchasing, (you may need to wait 6 months) you could get
a HELOC (at adjustable rate) to pay off the 2nd Loan.
Another option, a bit more risky is purchasing with just a 1st mortgage now and attempting to have your mortgage payment ‘recast’ at the same rate & the same term when you make your principal reduction payment. You will get the lowest rate.
I work with lenders who will recast a payment on loans that they service if the principal reduction is in excess of $10,000.
**The risk lies is not knowing who will be servicing your loan at the time you are ready to make your principal reduction.
I made several inquiries today and they all said the same thing.
They will not originate a loan with an explicit guarantee that any future servicer must honor their recast policy.
Depending on what % of equity you will have, I could possibly structure a creative scenario that would guarantee you could do this.
SO…..
Assuming that you qualify, you do have options to accomplish your goal.
