All In One HELOC Loans

We’re looking at buying a new home before selling our existing home. This unfortunately puts us between 35 and 39% DTI ratio until we sell our current home which is preventing us from getting a 30Y Fixed Jumbo Loan unless we can put 20% down (which we can’t for the 800k price range).

The two brokers we’re working with say we’re limited to an ARM which I’m averse to and an All In One HELOC Loan ([]( which seems like a blend of a HELOC and an ARM.

The All In One HELOC seems good on paper, but I’m skeptical. Because of our current DTI ratio, the All In One HELOC would be variable rate from the start with an initial rate of 5.04%. The online calculator indicates we’d pay the house off in 14 years assuming we put 8k into the HELOC per month with ~3k being spent on life… this is using an assumed average of 6.8% interest.

This seems to good to be true… what am I missing? Should I wait it out another 6+ months and save the additional 40k to get the 20% down to avoid this scenario?


If it helps, here’s current situation:

* Family of four
* 180k single income
* Existing home equity estimated 450k
* Would dump all of this into the new mortgage.