Since 92% of you that have a mortgage under 5%, 75% under 4%, and 30% under 3% you do NOT want to touch that rate/payment. If you need cash out of your property you only have one option then get a 2nd mortgage. The most common is a HELOC and the less common is a fixed second.
FYI you can get a 2nd mortgage for FULL DOC income or if self-employed use bank statements as income. Also, you can get a 2nd mortgage on investment properties.
HELOC ( home equity line of credit) is where you can draw on it and pay it back – it works like a credit card. The rate is adjustable, it is tied to PRIME, The prime rate changes when the head of the FED changes that rate up/down. Jerome Powell is the one who has been changing that rate these days, he raised the prime rate from 3.25 to 8.5% in the last 1.5 years. Prime sits at 8.5% and you can just pay the interest on a HELOC. Lenders/banks will give you from 70 to 95% of your home equity depending on many factors.
FIXED rate second mortgage is where you take all the money at once, have a fixed rate, and pay PI on that loan. Rates are typically higher on these and it does NOT act like a credit card. Once you pay down the loan you cannot borrow back on that loan. I am not a huge fan of these and they do serve a purpose but not for most.
HELOC SPECIAL If you are in CA, I have a lender that has some amazing HELOC rates now that might be able to help some homeowners out.
Promotional RATES for the 12 months, 3.99% to 5.99%, depending on the CLTV (combined loan to value). Promo is only good up to an 80% CLTV. Rates after the promo range from prime + .50 to prime + 1.5% and we can go up to 90% CLTV.
- FULL DOC or 24-month bank statement loans.
- Credit score 680 min and 720 min depending on program, loan amount and CLTV
- DTI 45% to 50% depending on CLTV
- We can do investment properties up to 70% CLTV
- 1 to 4 unit properties for investment
- 1 to 2 units properties for primary
We have many more options/lenders for HELOCs so set up a call with us to discuss your scenario.
