Home Equity Loan (HELOAN)
A home equity loan hands you a one-time lump sum at a fixed rate and leaves your existing first mortgage completely untouched, so if you locked in a low rate years ago you keep it and only borrow against the equity you have built. As a veteran-owned broker, Home Loans Inc shops your second-lien file across many investors on one application instead of pitching a single bank's version.
A fixed-rate second mortgage that leaves your first loan alone
A home equity loan, also called a HELOAN, is a second mortgage. You borrow a single lump sum against the equity in your home, repay it on a fixed rate and a fixed schedule, and your original first mortgage stays exactly where it is, same balance, same rate, same payoff date. You end up with two payments: the first mortgage you already had, and the new fixed second-lien payment.
That structure is the whole point. A HELOAN does not refinance or replace your first mortgage, so nothing about that loan resets. The new fixed rate applies only to the amount you draw against your equity, not to your entire mortgage balance. Because the rate is fixed and the term is set, your second-lien payment never moves, which makes it the predictable choice when you need a known sum for a known purpose.
The trade-off is that a HELOAN is a one-time draw. You receive the full amount at closing and begin repaying it immediately. If you want a revolving line you can pull from over and over, that is a HELOC, not a HELOAN, and the difference matters a lot depending on how you plan to use the money.
Keep your low first-mortgage rate while you tap your equity
This is the reason a HELOAN exists for most of the homeowners we see. If you bought or refinanced when rates were low, your first mortgage is an asset you do not want to give up. A cash-out refinance would force you to do exactly that: it pays off your existing first mortgage and replaces it with a brand new, larger first mortgage at today's rate, applied to the entire balance, not just the cash you pulled out.
A HELOAN sidesteps that completely. It sits behind your first mortgage as a separate lien, so the low rate on your large existing balance is preserved and only the new, smaller equity amount carries today's rate. You are not re-pricing money you already borrowed cheaply. For a homeowner with a low first-mortgage rate and a real need for cash, that distinction can be the difference between a payment that makes sense and one that does not, and it is the first thing we model on a call.
A HELOC achieves the same rate-protection goal because it is also a second lien, the difference is lump sum and fixed (HELOAN) versus revolving and variable (HELOC). Both protect the first mortgage. A cash-out refinance does not.
HELOAN vs HELOC vs cash-out refinance
All three turn equity into usable cash, but they are built differently. The right one depends on whether you need a fixed lump sum, a flexible line, or a full mortgage reset.
| Home equity loan (HELOAN) | HELOC | Cash-out refinance | |
|---|---|---|---|
| Lien position | Second mortgage behind your existing first | Second mortgage behind your existing first | New first mortgage that replaces your existing one |
| How you get the money | One lump sum at closing | Revolving line you draw and repay as needed | One lump sum at closing |
| Rate type | Fixed for the life of the loan | Typically variable, tied to an index | Fixed or adjustable on the new first mortgage |
| First mortgage | Untouched, rate and term preserved | Untouched, rate and term preserved | Paid off and reset at today's rate on the full balance |
| Payment | Two payments, fixed and predictable | Two payments, the second can change | One combined payment |
| Best when | You know the exact amount and want stability | You want flexible access over time | You are fine resetting your first mortgage anyway |
CLTV: the cap that decides your number
A HELOAN is sized by your combined loan-to-value, or CLTV: your first mortgage balance plus the new home equity loan, divided by your home's value. Lenders cap that combined figure, commonly somewhere in the range of about 85 to 90 percent depending on the investor, your credit, and the property. The equity sitting above that cap is the equity you cannot touch with this loan.
The math is simple once you see it on your own numbers. Take your home's value, multiply it by the CLTV cap to get the maximum total mortgage debt the lender will allow, then subtract what you still owe on your first mortgage. What is left is roughly the HELOAN you can draw.
Illustration only, not a quote or commitment to lend. Your actual CLTV cap, available amount, and approval depend on a current appraisal, your credit and income, the investor's guidelines, and the property type. We run your real numbers on a call. No rate or APR is implied by this example.
Best uses for a fixed-rate lump sum
A HELOAN shines when you have one defined expense and you value a payment that never changes. Here is where it fits the cleanest.
One-time large expense
A defined cost with a number attached, a major medical bill, a wedding, a down payment on a second property, college tuition. You know the amount, you want it now, and you want the payment locked.
Renovation or addition
A kitchen, a primary-suite addition, a new roof, a pool. A fixed lump sum funds the project up front and the fixed payment lets you budget the whole job without rate surprises mid-build.
Debt consolidation
Roll high-interest credit cards or personal loans into one fixed, lower-stress payment secured by your home, while keeping the low rate on your first mortgage instead of wrapping everything into a cash-out refi.
Why shop a HELOAN through a broker
Second-lien guidelines vary far more between investors than first-mortgage rules do. CLTV caps, minimum and maximum loan amounts, credit thresholds, how they treat condos and manufactured homes, and how they price a second lien all differ from one investor to the next. A single bank shows you a single bank's box. If your file does not fit that one box, the answer is no.
As a broker, Home Loans Inc submits one application and shops it across many second-lien investors, so the same borrower who gets a no from one source can get a yes from another on the identical numbers. We match your CLTV, your credit, and your property type to the investor whose guidelines actually fit, instead of forcing your file into the one program a retail lender happens to sell.
Home Loans Inc is veteran-owned, founded by Navy veteran Jason Sharon, who personally reviews the files and has spent 8+ years originating loans. He holds NMLS #1281448 (company NMLS #1728740). You will talk to a broker who shops the whole market for your second lien, not a call center reading one rate sheet.
Talk to a home equity loan specialist
Home Loans Inc: Jason Sharon, Mortgage Broker
2557 Ashley Phosphate Rd, North Charleston, SC 29418
From application to funded second lien
1. Pre-approval & equity check
We confirm your income, credit, and first-mortgage balance, then estimate your available equity against the CLTV cap so you know your realistic HELOAN range before anything else.
Get pre-approved →2. Match the right product
We compare a fixed HELOAN against a HELOC for your goal, lump sum versus line, fixed versus variable, and shop second-lien investors to find the guidelines your file fits.
HELOAN vs HELOC →3. Appraisal & underwriting
An appraisal sets your current value, underwriting confirms the numbers, and we keep your first mortgage untouched throughout so your low rate is never at risk.
Compare to cash-out →4. Close & fund
You sign, the lump sum funds, and you start a fixed, predictable second payment, with one broker who shopped the whole market on your behalf.
See all options →Home equity loans, frequently asked
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Jason knows his stuff! We highly recommend him for your mortgage needs! He responds timely, provides information you didn't know you needed, puts the client needs first, and makes common sense adjustments throughout the entire process.
Jason and his team did an amazing job for me. They communicated often and made the entire mortgage process smooth and efficient. I can genuinely say that they are honest, trustworthy and strive to provide the best service possible to their clients.
Jason has been awesome since the beginning. He has been communicative, professional, KNOWLEDGEABLE, and honest. I am very happy with all my services so far, and I recommend UWM!