Revolving line of credit with a 10-year draw period followed by a 20-year repayment period.
Loan Amounts $50,000 – $500,000
Minimum line draw at closing is the greater of $50,000 or 50% of the total line size.
Minimum credit score 680. If more than one borrower, we will use the lowest middle score among all borrowers.
- Single Family Home
- 2-4 Unit Properties
- Be able to pull funds only when you need to.
- Interest only mortgage payments are an option.
- Safety net for future large expenses, like weddings, vacations, schooling or home remodels.
- Allows you to pull cash out of the home without touching the first mortgage (if you have a great interest rate on the first mortgage, you may not want to change that).
- Maximum Qualifying Ratios on these products are 45%
- Value: Appraisals are not required on a standalone HELOC (a refinance, not a purchase transaction) if the size is under $250,000. There will be an alternative appraisal product ordered that is much less expensive.
Down Payment Savings
By using a HELOC, you can put less payment down on your purchase transaction. A common set up is 10% down, 10% HELOC and 80% first mortgage. This is very helpful if you don’t have the full amount of cash for 20% down and want to avoid the additional cost of monthly mortgage insurance.
Mortgage Insurance (MI) Avoided
If you use a concurrent HELOC with your home purchase and your first mortgage is 80% loan to value or lower, you will avoid having any mortgage insurance on the first mortgage.
Loan to Value
Maximum combined loan to value for a first mortgage and HELOC is 89.99%. Maximum loan size is $500,000 for a HELOC.
- Primary Residence: minimum 10.01% equity 1-4 units, 680 credit score & maximum $500,000 loan size.
- Second Home: minimum 20% equity 1 unit, and 700 credit score, maximum $500,000 loan size.
The HELOC transaction will be considered a refinanced cash-out transaction. Whatever loan size your HELOC is, the minimum draw when the transaction closes is 50% of the line.