» Cash-out Refinance
A cash-out refinancing loan involves taking a loan for an amount more significant than what you owe on your property. This works by replacing the existing mortgage with a new one with a higher total loan amount than the current one. These funds can serve various purposes, including financing renovations and consolidating debts.
» Home Equity Loan
A home equity loan (sometimes called a HEL) is a type of second mortgage where you can borrow against the home equity you already have. The equity is the amount your home is currently worth, excluding the amount of any existing mortgage you may have. Home equity loans are typically provided as a lump sum and have fixed repayment and interest rates.
Borrowers often use these loans to cover major purchases, debt consolidation, or for home upgrades.
» HELOC
Home Equity Line of Credit loans (HELOC) share similarities with home equity loans as they both involve borrowing against the equity in your home. However, the difference is that a HELOC isn’t paid out as a lump sum but as a revolving line of credit. This means that just like a credit card, these are “open-end loans,” meaning that you withdraw and repay as needed instead of borrowing a set amount at once.
» Piggyback Loan
A piggyback second mortgage refers to a home equity or HELOC loan that is acquired simultaneously with the primary mortgage. This is done either to cover a larger portion of the home’s purchase price or to circumvent the need for private mortgage insurance. The hard money 2nd loan covers a portion of the down payment, reducing the first mortgage’s loan-to-value (LTV) ratio. Piggyback loans are often structured as fixed-rate or Home Equity Line Of Credit loans.