HELOCS & Fixed Rate 2nd Mortgages

HELOCS and HELOANS are ways to access equity without refinancing your current mortgage.

HELOCS and Equity Solutions

The Difference Between an Equity Loan and an Equity Line (HELOC)

EQUITY LOAN

An Equity Loan is a fixed-rate mortgage that is placed in 2nd position behind the primary mortgage.

It is always a fixed rate, and 100% of the loan is funded to the borrower upon closing.

10, 15, 20, and 30 and 40-year amortizations are available.

INCOME

The income types available for an Equity Loan are:

Full income document loans or retirement income can also be used to qualify.

Minimum loan amount is $75,000 and can go as high as $750,000 but the maximum loan amount will decrease based on available equity and credit score.

The lowest acceptable credit score is 660.

The highest combined loan-to-value is 90% (combined with balance of 1st mortgage).

EQUITY LINE (HELOC)

The most popular and widely-used of the 2nd loans, the HELOC can also be in first position if there is no existing loan on the property.

The advantage of a HELOC is you only pay interest on the funds you are using.

The interest rate is tied to the prime rate plus a margin. Margins vary depending on loan amount, loan-to-property value, and FICO score.

The types of income verification available for this loan is:

  • W-2 and pay stubs if employed

  • If self-employed, 1 or 2 years of tax returns, depending on length of self employment. - or -

  • Bank Statement - one year of business or personal bank statements

  • If business bank statements are used, maximum loan amount is $750,000

  • If personal bank statements are used, maximum loan amount is $500,000

  • Owner-occupied, second homes, and investment properties are eligible.

  • 20-year loan, 5-year draw interest-only.

  • The minimum FICO is 660

Which Equity Loan or HELOC is right for you?

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