Home equity loans and HELOCs
A home equity loan or line of credit borrows against the equity in your home without replacing your first mortgage. It can make sense when the rate on your current mortgage is one worth keeping.
Homeowners who want to borrow against their equity and keep their current first mortgage.
What a lender will ask for
- Equity in the home. The lender caps how much of the home's value can be borrowed across both loans together.
- Income a lender can verify, and a credit history the lender reviews.
- An appraisal or another valuation of the property.
- Details of the mortgage you hold now.
What it offers
- Your first mortgage, and its rate, stay as they are.
- A line of credit charges interest only on what you have drawn.
- Closing costs are often lower than on a cash-out refinance.
What to weigh up
- Your home secures the loan, so falling behind puts the home at risk.
- A line of credit usually has a variable rate, so the payment can rise.
- Rates are usually higher than on a first mortgage.
- A line of credit has a period for drawing and then a period for repaying, and the payment can rise sharply when the second begins.
- Texas sets its own rules for borrowing against a home you live in, including how much can be borrowed and how often. We explain how they apply before you commit.
Related loan programs
- RefinanceHomeowners who want a different rate or term, or who want to draw on the equity they have built.
- Reverse mortgageOlder homeowners with substantial equity who want to draw on it and stay in their home.
- Construction and renovationBuyers building a new home, and owners buying or keeping a home that needs significant work.
Start with a pre‑qualification request
Tell us what you want to do and where, and we come back with options compared across multiple wholesale lenders. A pre-qualification request starts it, and nothing is a commitment until a lender has reviewed your file.