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Started by tahoe_throw, October 02, 2019, 09:22:55 AM

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I just bought a house in for 1.3M. I paid cash. It will be my primary residence. I also own a townhouse. I have a 380k mortgage on the townhouse and the property value is ~800k.
My townhouse mortgage is with a credit union, so I went to them to try to open a HELOC on the newly purchased house. Credit union said that I need to wait for 6 months after I purchase a house before I can apply for HELOC with them.
I then went to Bank Of America -- I have a checking account with BOA. Initially, BOA said no problem and they would be able to open a HELOC with a 975k limit (75% of the house value). But then they said that the max HELOC they can open is for 500k (!) only!
I understand the DTI requirements and all that jazz, but it does not feel right that I just purchased a home for 1.3M cash and the HELOC limit is 500k – I was expecting HELOC limit to be closer to 1 MM – 75% of the value of the house.
My annual W2 income is 225k and the monthly mortgage on the townhouse is 1,873. I don't have any other debts. My credit score is over 800.
Does it seem right to you, financial samurais? Should I just suck it up and open a 500k HELOC or should I continue to pursue other financial institutions hoping to get a higher HELOC limit?

P.S. I also asked BOA if they would increase my limit if I rent my townhouse for 3.5k/month and they said that it would increase the HELOC limit by 100k-150k tops -- still very far from the 1 MM limit I was expecting.


 I guess my question is what was the reason for paying cash for the home to then subsequently get a home-equity line of credit? Did it help you get a better price?

Also, what do you plan to do with the $500,000?

I haven't taken out a home equity line of credit before, but I would think that $500,000 is a lot of money based on the purchase price of the home.