Tap your home equity without refinancing your first mortgage.

Fixed home equity loan (second lien)

A home equity loan is a lump-sum second mortgage with a fixed rate and fixed term. You get the full amount at closing and repay it on a predictable schedule — often 10, 15, or 20 years. Because it is a second lien behind your existing mortgage, your original first-mortgage rate stays untouched.

• Rate type: Fixed for the life of the loan.
• Combined LTV cap: Typically 85% to 90%.
• Credit score: Most programs require 680+.
• Closing costs: Often $0 to $2,500.
• Timeline: 2 to 4 weeks in most cases.
• Best when: You need a one-time amount and want payment certainty.

HELOC (home equity line of credit)

A HELOC is a revolving credit line secured by your home. You are approved for a maximum amount, but you only pay interest on what you actually draw. Most HELOCs have a 10-year “draw period” where you can access funds, followed by a repayment period. Rates are typically variable, tied to Prime, though some lenders offer fixed-rate conversions on chunks of the balance.

• Rate type: Usually variable (Prime + margin).
• Draw period: Typically 10 years.
• Repayment period: 15 to 20 years after the draw period ends.
• Interest charged on: Only the drawn balance, not the full line.
• Closing costs: Often $0 on promotional programs.
• Best when: You need ongoing access and flexible draws.

Cash-out refinance (first lien)

A cash-out refinance replaces your entire first mortgage with a new, larger one and gives you the difference in cash. It is the right answer when you are already planning to refinance your first mortgage for other reasons. It is usually the wrong answer when you want to keep the rate on your current first mortgage — the “blended cost” of re-pricing the full balance almost always exceeds the cost of borrowing only the new money as a second lien.

Illustrative example: Say you hold a $280,000 balance on a $525,000 home and need $60,000 in cash. A cash-out refinance would re-price the full $340,000 — in this illustration, adding roughly $950 per month. A $60,000 fixed home equity second adds about $590 per month while leaving your current first mortgage untouched — saving roughly $360 per month in this scenario. Your actual rate and payment depend on your situation and the market that day, so we don't post rates here; ask us for real numbers. Figures are illustrative only and subject to change and eligibility.

See the full breakdown: the refinance page walks through cash-out mechanics in more detail.

HELOC vs. home equity loan — how to choose

Pick a fixed home equity loan when you know the amount. If you have a specific one-time need — paying off $45,000 in credit card debt, funding a $60,000 kitchen renovation, writing a $75,000 down payment check on an investment property — a fixed-rate second wins. You lock in the rate, know the exact monthly payment, and stop thinking about it.

Pick a HELOC when the need is open-ended or staged. Renovations that will happen in phases, college tuition spread over four years, or a safety-net line for future medical or business expenses all fit the HELOC structure. You only pay interest on what you draw, and the line remains available for future use.

Consider rate risk honestly. HELOC rates move with Prime. When the Fed raises rates, your payment can climb. Many HELOC borrowers who opened lines in 2021 were surprised by payment increases of hundreds of dollars a month as rates rose. Budget for rate movement, and know that some lenders let you lock portions of the balance at a fixed rate.

Know the combined LTV limit. Most second-lien programs cap combined loan-to-value (first mortgage balance plus new second) at 85% or 90%. Some stretch to 95% for strong credit profiles. Beyond that, cash-out refinance or specialty products are the only options.

Home equity in New Jersey — what to know

NJ homeowners are sitting on unusual equity positions. Median single-family values across New Jersey are above $525,000, and over 48% of NJ homeowners are equity-rich — they own at least half of the home outright. For homeowners in Burlington, Camden, Gloucester, Monmouth, Ocean, Middlesex, Bergen, and Essex counties, that often means substantial borrowing capacity without touching an existing first mortgage.

Attorney review. NJ home equity closings require an attorney. Budget $800 to $1,500 for attorney fees plus standard title and recording costs. Many HELOC programs offer “no closing cost” promotions where the lender covers these fees in exchange for keeping the line open for 3 years.

Property tax escrow stays with the first mortgage. A major advantage of the second-lien path over cash-out refinance in NJ: your existing escrow account stays in place. A cash-out refi resets the escrow, which — because NJ property taxes average $9,000+ per year — can require a meaningful cushion at closing. A second lien avoids that entirely.

Home equity in Pennsylvania — what is different

No attorney required for closing. PA home equity closings are handled by the title company without a mandatory attorney, saving $800 to $1,500 versus NJ. Many lenders also offer no-cost HELOC promotions in PA with minimal paperwork.

Transfer tax exemption on liens. Pennsylvania does not apply transfer tax to new mortgage or home equity liens as long as title is not changing. For homeowners in Bucks, Montgomery, Chester, Delaware, and Philadelphia counties, this eliminates a cost that would otherwise apply on title transfers.

Lower property taxes, higher borrowing comfort. Because PA property taxes are typically much lower than NJ, your overall housing obligation is smaller, which often leaves more room for a second-lien payment in the DTI calculation. Practical impact: some PA homeowners qualify for larger home equity loans than they would expect based on income alone.

Common home equity scenarios

“I want to keep the rate on my first mortgage and still renovate.” This is the textbook second-lien case. A fixed home equity loan or a HELOC leaves your first mortgage untouched while giving you the renovation cash you need. We'll model the blended cost against a cash-out refi so you can see which fits your situation.

“I have $50,000 in credit card debt.” A fixed home equity loan to consolidate may lower your monthly interest cost. The caveat — you are converting unsecured debt into debt secured by your home. This works if the cards stay paid off. We will model the math and the behavioral risk honestly before recommending — your rate depends on your situation, so ask us for real numbers.

“I want a safety-net line of credit, even if I do not use it.” A HELOC set up during good times is available when you need it. Many of our clients open HELOCs as hurricane preparedness, job transition, or medical emergency reserves — and pay nothing unless they draw.

“I want to buy an investment property and need a down payment.” Using a home equity loan or HELOC on your primary as the down payment for a rental is a common wealth-building move. We coordinate with our investor loan team so the full picture — equity source, DSCR qualification on the new property, closing sequence — lines up.

“I want to pay tuition for my kid's college.” A HELOC spreads tuition across the draw period and can be an alternative to Parent PLUS loans. But compare carefully — Parent PLUS has forgiveness and income-driven repayment options a HELOC does not.