Keep your rate. Tap your equity.
If you locked a great rate a few years ago, don't give it up. A second lien lets you borrow against your equity without touching your first mortgage.
Overview
You want cash from your equity. But your first mortgage is at a rate you'll never see again. A cash-out refinance would replace that low rate with a higher one on the entire balance. That's the wrong trade for most people in this position.
A second lien lets you keep the first mortgage exactly where it is. Borrow separately. Pay the higher rate only on the smaller equity draw. The total cost is almost always less.
Two flavors. A home equity loan is a fixed-rate lump sum. Predictable payment, known amount. A HELOC is a variable-rate revolving line. Draw what you need, when you need it, pay interest only on what's outstanding. Each fits different situations.
Texas adds complexity. Constitutional LTV cap. Mandatory cooling-off period. Closing location restrictions. Spousal consent. Minimum draw amounts for HELOCs. I handle these files regularly and navigate the compliance so you don't have to.
Key Details
How I Handle This
I run the math. Second lien versus cash-out refi on your specific numbers. Not a general rule. Your rate, your balance, your equity, your need. Then I match you with the best second-lien lender and manage the Texas compliance process.
Questions I Get
HELOC or home equity loan?
Known fixed amount? Home equity loan. Ongoing or uncertain needs? HELOC. I help you decide based on your situation.
Second lien or cash-out refi?
If your first mortgage rate is well below today's market, second lien almost always wins. I show the comparison.
Is the interest deductible?
Only if used to buy, build, or improve your home. Not for debt consolidation or other uses. Consult your tax advisor.
What about the HELOC draw period ending?
After the draw period, the balance converts to amortizing payments. Meaningful increase. I model this upfront.
Low rate you don't want to lose?
Send me your current loan details. I'll compare second lien vs cash-out and show you how the numbers compare.