Home equity

Home Equity Options: HELOC, Second Mortgage, HEI and Reverse Mortgage

There’s more than one way to turn equity into cash. Compare lines of credit, fixed second mortgages, no-payment home equity investments and reverse mortgage lines of credit, and keep your low-rate first mortgage where it makes sense.

Start my HELOC request Apply online (digital HELOC)

5ways to tap equity

Keepyour first mortgage

Rentalsand primary homes

Oneapplication, many lenders

The short answer

What are my options for using home equity?

You can borrow against equity with a HELOC (a revolving line), a home equity loan or second mortgage (a fixed lump sum), or a cash-out refinance; trade a share of future value for cash with a home equity investment; or, at 62 and older, use a reverse mortgage line of credit. The right one depends on whether you want a payment, a fixed rate, and to keep your current mortgage.

Option	How you get money	Monthly payment	Keeps your first mortgage	Property types
HELOC	Revolving line: draw, repay, redraw	Yes, usually variable	Yes (second lien) or replaces it (first lien)	Primary, second home, rental
Home equity loan / second mortgage	One lump sum	Yes, fixed	Yes	Primary, second home, rental
Home equity investment (HEI)	Lump sum for a share of future value	No	Yes	Primary, second home, rental
Reverse mortgage line of credit	Line of credit, monthly payout or lump sum	No required mortgage payment	Pays it off	Primary residence, age 62+
Cash-out refinance	New, larger first mortgage	Yes	No, replaces it	Primary, second home, rental

Lines of credit

When does a HELOC make sense?

A HELOC fits when you need money in stages, such as rehab draws or the next down payment, and want to pay interest only on what you use. It can sit behind your existing mortgage so that rate stays put.

Pick the version that matches how you earn:

Fixed lump sum

When is a second mortgage (HELOAN) better?

Choose a home equity loan when you know the exact amount you need and want a fixed rate and payment. It’s paid out at closing and sits behind your first mortgage.

Investors can qualify on rental income with a DSCR HELOAN, with fixed terms from 15 to 30 years. More in DSCR second lien loans and DSCR HELOC vs. HELOAN.

No monthly payment

How does a home equity investment (HEI) work?

A home equity investment gives you cash today in exchange for a share of your home’s future value, with no monthly payment. You settle it when you sell, refinance or reach the end of the term.

Our HEI programs go up to $600,000, start at a 500 credit score, require no income verification and work on primary, second and investment homes. See the home equity investment page and the HEI calculator.

Age 62+

What is a reverse mortgage line of credit?

A reverse mortgage lets homeowners 62 and older borrow against their home with no required monthly mortgage payment; the loan is due when they no longer live there. With a federally insured HECM line of credit, you only pay interest on money you use, and the amount available grows over time.

You still have to pay property taxes and insurance and keep the home in good repair, and you’ll meet with a HECM counselor before you apply. Neither you nor your heirs will owe more than the home is worth. Learn more on our reverse mortgage page.

How to choose

Which home equity option should I choose?

Start with three questions: do you need the money all at once or over time, can you take on a monthly payment, and do you want to keep your current mortgage rate? Those answers point to a HELOC, a HELOAN, an HEI, a reverse mortgage or a cash-out refinance.

Need money in stages and want to keep a low first-mortgage rate: HELOC
Need one set amount with a fixed payment: second mortgage / HELOAN
Can’t take on another payment, or income is hard to document: HEI
62 or older, living in the home, want a growing credit line: reverse mortgage line of credit
Want one loan and the most cash, and today’s rate is fine: cash-out refinance

FAQ

Home Equity Options FAQs

What are my options for using home equity?

The main options are a HELOC (revolving line of credit), a home equity loan or second mortgage (fixed lump sum), a home equity investment (cash for a share of future value), a reverse mortgage line of credit (62+), and a cash-out refinance.

Which home equity option lets me keep my low-rate mortgage?

A HELOC, a home equity loan (HELOAN) and a home equity investment can all sit behind your existing first mortgage, so its rate stays the same.

Which home equity option has no monthly payment?

A home equity investment has no monthly payment; you settle it when you sell, refinance or reach the end of the term. A reverse mortgage also has no required monthly mortgage payment, but you must keep paying taxes, insurance and upkeep.

What is a reverse mortgage line of credit?

With a federally insured reverse mortgage (HECM), homeowners 62 and older can take funds as a line of credit; you only pay interest on what you use, and the amount available grows over time.

Can I get these on an investment property?

HELOCs, DSCR home equity loans and home equity investments are available on rentals. Reverse mortgages are for your primary residence only.

Get started

Not sure which option fits?

Send us the basics and we’ll lay the options side by side for your property, then you can book a call on the next screen.

W-2 or 1040 income? Apply online for a HELOC

Prefer to talk first? Call or text (619) 404-6637.

Programs, guidelines and terms described here come from the wholesale lenders we broker loans to and change often. This is not a commitment to lend; all loans are subject to credit approval, underwriting, property eligibility and state availability. Rates and payment terms are not quoted on this page. Trevor Gravink, NMLS #1707407 | Broker Buddy LLC, powered by Adaptive Mortgage Solutions, NMLS #2022974. Equal Housing Opportunity. A home equity investment is not a loan; the settlement amount depends on your home’s future value. Reverse mortgages require HECM counseling and are available only on a primary residence.