Do you know the amount?
A known, fixed number points to a fixed second mortgage. An amount that will emerge over months points to a line of credit.
Keep the first mortgage. Use the equity.
If you locked a low rate on your first mortgage, refinancing the whole balance to get at your equity means giving that rate up. A second mortgage or a line of credit borrows against the equity and leaves the first loan exactly where it is.
A line, or a lump sum.
A HELOC is a revolving line of credit secured by your home. You draw what you need, when you need it, and pay interest only on what you have drawn. The rate is typically variable. It suits expenses that arrive in stages, or that you cannot size precisely up front.
A second mortgage, sometimes called a HELOAN, is a fixed lump sum at a fixed rate with a fixed payment. It suits a known, one-time amount — paying off specific debts, or a project you have already priced.
- Renovations and home improvement
- Consolidating higher-rate debt
- Tuition, medical costs, or a large one-time expense
- Down payment on another property
- Keeping cash available without touching a low first-mortgage rate
This is your house
Both are secured by your home, which is what makes the rate lower than unsecured borrowing — and what raises the stakes. Consolidating credit cards into a loan against your house converts unsecured debt into secured debt. That is often the right move, but it should be a deliberate one.
How to choose between them.
The question is usually about timing and certainty, not about rate.
When do you need it?
A HELOC gives you access you can leave unused. A second mortgage funds once, and you begin paying on the whole balance immediately.
Fixed or variable?
A fixed second gives you a payment that cannot move. A HELOC usually carries a variable rate, which means the payment can change over time.
When a cash-out refinance is better anyway.
If your existing first mortgage carries a rate at or above current pricing, or if you need a large amount relative to your equity, replacing the whole loan through a cash-out refinance can beat layering a second on top. The rule of thumb is simple: the more attractive your current first-mortgage rate, the more a second makes sense. We will price both and show you the combined monthly cost either way.
What we will ask you for
What we will ask you for
- Your current first-mortgage statement
- Most recent property tax bill and homeowners insurance declaration
- Recent income documentation — pay stubs, W-2s, or returns
- Last 2 months of bank statements
- HOA statement, if applicable
- A rough figure for what you need and what it is for
Common questions.
Will this affect my first mortgage?
No. That is the entire point. Your existing loan, rate, and payment stay exactly as they are. The new loan sits behind it in second position, which is also why second-position pricing runs above first-mortgage pricing — the lender is second in line if anything goes wrong.
How much can I borrow?
It depends on your equity, your income, and the lender’s limit on combined loan-to-value across both loans. Send us your estimated value and current balance and we can tell you roughly where you land before you formally apply.
Is the interest tax deductible?
It can be, but the rules depend on how the money is used and on your personal tax situation. We are not tax advisors and will not pretend otherwise — ask your CPA before assuming a deduction, particularly for consolidation or non-property uses.
Can I get a HELOC on an investment property?
Sometimes. Fewer lenders offer them and terms are tighter than on a primary residence. Tell us the occupancy up front, because it substantially narrows the field.
What happens when the draw period ends?
Most HELOCs have a draw period during which you can borrow and pay interest only, followed by a repayment period where the balance amortizes and the payment rises — sometimes sharply. Know that date before you take the loan, and plan for it. We will point it out in your specific terms.
Tell us what the money is for.
Send us your first-mortgage balance, a rough value, and what you need. We will tell you whether a line, a fixed second, or a refinance is the cheaper way to get there.