HELOC and Home Equity Loans
Available in Georgia, Florida, South Carolina, Alabama, Tennessee
A HELOC and a home equity loan both let you borrow against your equity while keeping your existing mortgage in place. A HELOC is a revolving line you draw from as needed with a variable rate. A home equity loan is a fixed lump sum at a fixed rate. Both go up to 90% of your home’s value.
Which one you want
Take the HELOC when you do not know the total cost yet, or the spending is staged over time. A renovation, tuition across several years, a business that needs working capital at unpredictable moments.
Take the home equity loan when you know the number. Consolidating a specific amount of debt, one defined project, buying something with a price on it. A fixed rate and a fixed payment are worth a lot when the amount is not in question.
| HELOC | Home equity loan | |
|---|---|---|
| How you get the money | Draw as needed | One lump sum at closing |
| Rate | Variable | Fixed |
| Term | 3 or 5-year draw period | 10, 15, 20, 25, or 30 years |
| Amount | $25,000 to $500,000 | $25,000 to $500,000 |
| Maximum combined LTV | 90% | 90% |
| Minimum credit score | 640 | 640 |
One thing to know about the HELOC
Your initial draw has to be at least 75% of the line. You cannot open a $200,000 line, take $10,000, and leave the rest sitting there for later.
That matters when you are sizing the line. Ask for what you actually intend to use rather than the largest amount you can get approved for, because you will be drawing most of it at closing either way.
You may not need a full appraisal
Under $400,000, the valuation can often be handled with an automated valuation model, a broker price opinion, a desktop appraisal, or an exterior-only appraisal. Over $400,000 a full appraisal is required.
That usually means less cost and a faster close on smaller lines, which is a real practical advantage most lender pages never mention.
Both products also work on primary residences, second homes, and investment properties. A lot of equity products are primary residence only, which makes these useful for pulling a down payment out of one rental to buy the next.
How this compares to the Homeowner Accelerator
The Homeowner Accelerator is a first-lien line of credit that replaces your mortgage entirely. A HELOC or home equity loan is a second lien that leaves your existing mortgage alone.
The deciding question is usually your existing rate. If you are sitting on a mortgage you would hate to lose, a second lien leaves it untouched. If your first mortgage rate is not worth protecting, the Accelerator is worth a look, and it goes to $3.5 million rather than $500,000.
Common questions
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line you draw from as needed at a variable rate. A home equity loan is a fixed lump sum at a fixed rate. Same maximum loan-to-value and minimum credit score, different structure.
How much can I borrow?
Up to 90% of your home’s value including your existing mortgage, from $25,000 to $500,000.
Do I have to draw the whole line at once?
On the HELOC, your initial draw must be at least 75% of the line.
Can I use one on a rental property?
Yes. Both work on primary residences, second homes, and investment properties.
Do I need an appraisal?
Under $400,000 there are often faster and cheaper alternatives. Over $400,000 a full appraisal is required.
Will this affect my current mortgage?
No. Both sit behind your existing loan and leave it untouched.
This is not a commitment to lend. Rates, programs, and terms are subject to change without notice. All loans are subject to credit approval and property qualification.