Equity lending
Compare HELOCs, fixed seconds, cash-out refinancing, and reverse mortgage options.
Short answer
Home equity can be accessed with a HELOC, fixed-rate second mortgage, cash-out refinance, or for eligible older homeowners, a reverse mortgage. The best option depends on how much cash is needed, how long it will be used, the existing first-mortgage rate, payment tolerance, age, and long-term plan.
Who this is for
- Homeowners protecting a low first-mortgage rate
- Borrowers comparing flexible access with a fixed lump sum
- Families consolidating debt or funding improvements with a defined payoff plan
- Homeowners 62 or older evaluating a HECM with required counseling
What it takes to qualify
- Sufficient available equity after the new lien and program limits.
- Credit, income, occupancy, and property eligibility for HELOCs and fixed seconds.
- For HECM, age, primary-residence, financial assessment, property, and HUD-approved counseling requirements.
How it works with me
A process you can see the whole way through
Define the use
Amount, timing, repayment plan, and whether future draws are needed.
Protect the existing loan
We compare keeping versus replacing the first mortgage.
Model combined cost
Payments, rate behavior, fees, term, and total interest are reviewed together.
Choose the clean exit
The payoff or long-term plan is documented before borrowing.
What to know before you decide
Protect the first mortgage when it matters
Replacing an existing low-rate first mortgage to pull a smaller amount of cash can be expensive. A HELOC or fixed second leaves the first loan in place. The comparison should measure the combined payment and total cost, not just the new second-lien rate.
Flexible versus predictable
A HELOC is useful for draws over time and typically has a variable rate. A fixed second delivers a lump sum with a set payment. A cash-out refinance replaces the first loan. A HECM has different age, counseling, payment, and equity rules.
Four ways to use equity
| HELOC | Fixed second | Cash-out refinance | HECM reverse | |
|---|---|---|---|---|
| Funds | Draw as needed | Lump sum | Lump sum | Line, monthly draws, lump sum, or mix subject to rules |
| Rate | Usually variable | Usually fixed | Usually fixed | Fixed or adjustable structures |
| First mortgage | Stays | Stays | Replaced | Existing liens are paid at closing |
| Monthly P&I | Required under terms | Required | Required | No required monthly principal and interest payment while obligations are met |
| Special requirement | Equity and underwriting | Equity and underwriting | Full first-lien underwriting | Age 62+, counseling, occupancy, taxes, insurance, upkeep |
HECM material is not from HUD or FHA and has not been approved by a government agency.
Rates and terms subject to change without notice. Not a commitment to lend. Not available in all states. This is not tax, legal, or financial advice. Consult a qualified professional for your specific situation.
Run your own numbers first
Use the HELOC-versus-cash-out calculator, then email the result for a fixed-second and reverse comparison.
Open the calculatorsRelated programs
Equity lending: common questions
Should I use a HELOC or fixed second?
A HELOC fits uncertain or staged draws, while a fixed second fits a known lump sum and predictable payment. Rate risk and payoff timing matter.
Should I refinance my first mortgage to get cash?
Only after comparing the new payment and lifetime cost against keeping the first loan and adding a second lien.
Is a reverse mortgage the same as a HELOC?
No. A HECM is an FHA-insured reverse mortgage for eligible homeowners 62 and older, with counseling and ongoing property-charge obligations.
Can I use equity for debt consolidation?
Potentially, but unsecured debt becomes debt secured by the home. The plan should reduce risk and include a realistic payoff strategy.
Fine-tune your Equity lending plan
Send the property, purpose, timing, and numbers you already know. The email opens prefilled for this Equity lending page so the review starts in the right lane.
MortgageOne Inc. is licensed for consumer mortgage lending in 41 states and Washington, DC. Chris Lamm is individually licensed in 19 states.