If you locked a low rate on your first mortgage, refinancing to get cash means giving that rate up on your whole balance. A second-lien HELOC or fixed second mortgage leaves your first mortgage where it is and borrows only against the equity you've built.
*Available on qualifying programs; eligibility, loan amounts, and terms vary by program, property, and borrower profile. "Keep your first mortgage" applies to second-lien products.
Reviewed by Taylor Cabaniss, Founder & Mortgage Broker, NMLS #910852Updated
Say you owe $300,000 at a rate well below today's market and need $75,000. A cash-out refinance reprices the whole $375,000. A second lien borrows $75,000 and leaves the original $300,000 alone. If your current rate is at or above market, a refinance may do more, we'll run both.
| HELOC | Fixed Second Mortgage | |
|---|---|---|
| How you receive it | A revolving line you draw from as needed | A lump sum at closing |
| Interest charged on | Only what you've drawn | The full balance from day one |
| Rate | Variable, tied to an index | Fixed for the life of the loan |
| Payment during draw | Interest-only available | Principal and interest from the start |
| Best for | Ongoing or uncertain expenses | A known, one-time amount |
Keep in mind: a HELOC's rate can change over time, and making interest-only payments during the draw period does not reduce principal. Payments may increase when the repayment period begins. We'll show you how both the current and potential future payment compare before you choose.
Second-lien financing on rental properties can be difficult to find. We have both.
Buying before you sell? See the Bridge HELOC on our Buy Before You Sell page. On many programs, an automated valuation may be available instead of a full appraisal, depending on the loan amount, property, and valuation result.
Renovations, a down payment on a rental or second home, buying before you sell, consolidating higher-rate debt, or a reserve you may never touch.
On debt consolidation: moving high-rate balances to a lower-rate second lien can reduce what you pay, but the debt becomes secured by your home and a longer term can increase total interest even at a lower rate. We'll run the real numbers with you.
A Mount Pleasant homeowner with a rate well below market wants $90,000 for a renovation. A second lien borrows only the $90,000 and leaves her original mortgage untouched.
A HELOC is a revolving line with a variable rate and interest only on what you draw. A fixed second mortgage is a lump sum with a fixed rate and payment.
A second-lien HELOC or fixed second doesn't replace or change your first mortgage. Your rate and terms stay in place.
It depends on your equity, the program, and the property. Combined loan-to-value goes up to 95% on qualifying second-lien programs for primary residences and second homes, and up to 80% on qualifying investment property programs.
Yes. We offer HELOCs and fixed second mortgages on qualifying rentals, qualified with full documentation or with bank statements, P&L, assets, or DSCR.
HELOCs generally carry variable rates that can rise or fall over time, subject to the program's terms and rate caps. Fixed second mortgages carry a fixed rate for the full term.
Let's TalkTell us the property, roughly what you owe, and what you're funding. We'll tell you whether a line, a fixed second, or a refinance fits best.
Loan programs, terms, eligibility, loan amounts, down-payment requirements, credit requirements, and closing timelines are subject to lender guidelines and may change. Not all borrowers or properties will qualify. Home equity lines of credit carry variable interest rates that may increase over time.
Lowcountry Home Loans | NMLS #1717832 | 802 Coleman Blvd, Suite 209, Mt. Pleasant, SC 29464 | 843.800.0178