Cash from equity without giving up a good first mortgage: second lien or cash-out refinance
Route 1: a HELOC
The short version
A HELOC is a revolving line secured by your home that sits behind your first mortgage. You draw as needed during a draw period, often paying interest only, then repay during a repayment period. Rates are usually variable, so the payment can change, and the lender can freeze or reduce the line in some situations.
Last reviewed against the primary sources listed below.
Watch for
- Variable rates and caps.
- The jump in payment when the draw period ends.
- Annual or inactivity fees.
- Early closure fees.
Lien questions
Can a HELOC payment go up?
Yes. Most HELOCs have variable rates, and payments usually rise when the repayment period begins.