A Home Equity Loan, also known as a HELOAN, allows homeowners to access equity from their property as a second mortgage while keeping their current first mortgage in place.
Unlike a HELOC, which is usually a variable-rate line of credit with a draw period, a HELOAN is typically a fixed-rate loan with a set monthly payment. This gives borrowers more predictability and can be a strong option for debt consolidation, home improvements, large expenses, or accessing cash without refinancing the entire first mortgage.
Many HELOAN programs offer terms such as 30-year, 25-year, or 20-year fixed options, depending on the borrower’s goals and qualifications. In many cases, loan amounts under $250,000 may not require a full appraisal, which can help make the process faster and more convenient.
A HELOAN may be a good fit for homeowners who want:
- A fixed interest rate
- A predictable monthly payment
- A lump sum of cash at closing
- To keep their current first mortgage intact
- A faster process compared to a full cash-out refinance
Program availability, appraisal requirements, credit qualifications, loan amounts, rates, and terms can vary by lender and borrower profile.
