I partner with several Lenders that offer Home Equity Loans. The types and terms vary between Lenders and I will help you find the best options to meet your needs. Some examples of different Equity Loans include Standalone & Piggyback HELOCs, and Fixed Rate 2nd Mortgages. The information below is general information about HELOCs.
General Information
What is a HELOC?
Home Equity Line Of Credit
A line of credit secured by a property that a borrower can draw from, up to the amount they are approved for
What is a Standalone HELOC?
Tied to a property that has an active mortgage attached to it
The HELOC and the active mortgage do not need to be from the same lender
Standalone HELOC. This product offers current homeowners a simple way of tapping into their home’s equity when a cash-out refinance doesn’t make sense due to having a low interest rate on their current mortgage. It’s a popular option for accessing cash that can be used to consolidate and pay down debt, make home improvements, cover tuition and more.
What is a Piggyback HELOC?
Also referred to as a 2nd, Simultaneous Close HELOC
The HELOC is done at the same time as the first mortgage on the subject property
Typically done with a purchase transaction
Piggyback HELOC. This product allows qualified conventional borrowers to secure a new mortgage on the home while simultaneously opening a home equity line of credit. Doing so allows borrowers with less available for a down payment to borrow additional money that can help them avoid mortgage insurance. It’s also a great option for borrowers with jumbo loan amounts who want to qualify for a conforming loan instead.
GENERAL TERMS
Note Rate – The interest rate the loan closes on
Draw – Dollar amount the borrower pulls from against the available line of credit
Initial Draw Amount – The dollar amount the borrower pulls from the credit line at closing
Draw Period – Timeframe in which the borrower is able to withdraw funds from the available line of credit. (for example, 3 or 10 years)
Repayment Period – The timeframe in which the borrower repays the balance owed. Once the repayment period begins draws are no longer permitted. The outstanding balance becomes the loan amount.
Max Loan Amount – The maximum dollar amount that can be borrowed with a HELOC
Total Line Amount/Max Loan Amount – The highest balance that can be drawn on the HELOC
