A second mortgage and a Home Equity Line of Credit (HELOC) lets you turn an illiquid asset (your home equity) into usable cash. These are secondary mortgages and do not replace or disturb your Current first mortgage. It stays in place.

Both second mortgages and HELOCS use your home as collateral and therefore have a much lower interest rate than personal loans, credit cards, and other unsecured debt. This makes both options attractive.

A second mortgage and a HELOCs while similar are different types of mortgages with different terms:

• A second mortgage comes with fixed payments and a fixed interest rate for the term of the loan.
• HELOCs are revolving credit lines (similar to a credit card) that come with variable interest rates and, as a result, variable minimum payment amounts.
• The draw periods of HELOCs allow borrowers to withdraw funds from their credit lines as long as they make interest payments. The draw period is typically 5 or 10 years
• The term of a second mortgage or HELOC can range from 10 years to 30 years.

The interest rate on a second mortgage and HELOC are higher than on a traditional first mortgage. However, the costs to obtain the mortgage is much less.

We provide information and options for a second mortgage and/or a HELOC, and compare this option to a full refinance. This analysis is based on your unique circumstance and goals and is part of our mortgage planning process.