Can I combine my mortgage with a HELOC?

Whether you are trying to get a HELOC while you still have a mortgage or are trying to consolidate your HELOC and current mortgage under a new one, there are options for combining your HELOC and mortgage either way.  

A HELOC, or home equity line of credit*, typically gives you a line of credit based on the home equity you have built up in your home. While you have this line of credit, you will make payments on the amount you withdraw. You can make additional draws on your line of credit as you pay back the amount you withdraw and interest.  

Start taking advantage of a HELOC with your home mortgage by filling out a HELOC application today! 

Can I have a HELOC and a mortgage? 

Many borrowers choose to get a HELOC alongside their home mortgage. A HELOC lets borrowers access their home equity without needing to sell their properties.  

Of course, since your borrowing power is based on your home’s equity, if you choose to get a HELOC while you have a mortgage, the amount you will be able to access will not be as high as if your mortgage were paid off.  

Your home’s equity is the amount of your home you outright own. It can be determined by the difference between the current value of your home and what is left on your mortgage. 

How would a HELOC work with my current mortgage? 

A typical HELOC will open a line of credit based on the equity you’ve built up in your home. You can draw what you need up to your approved limit. After this draw period, during which you will typically only need to make interest payments, you will enter a repayment period. During your repayment period, you can no longer draw on your account and will have to make payments on the principal loan and interest.  

Our HELOC gives you your total loan amount upfront. Like a typical HELOC, your loan amount will be based on the home equity you’ve built up. As you start repaying your loan, you will be able to make additional draws on your line of credit.  

If you don’t own your home outright, a HELOC will work as a second mortgage, meaning you will have to make monthly payments on both your original mortgage and your HELOC. 

What is the difference between a HELOC and a second mortgage? 

A second mortgage is a type of loan that allows homeowners to borrow against the value of their home, receiving funds in one lump-sum, while keeping their existing mortgage in place.  

Since it’s “second” in priority to your first mortgage, a second mortgage could come with higher interest rates to account for the lender’s added risk.  

If you already have a mortgage and opt for a HELOC, it will sit in this second position. Both options can be useful for debt consolidation, large expenses or reaching specific financial goals.  

What is the difference between a HELOC and a cash-out refinance? 

A HELOC offers a flexible credit line that allows you to access your home’s equity. It works much like a credit card, enabling you to borrow money repeatedly within a set limit. 

A cash-out refinance** is a way to use the value of your home to your advantage by replacing your current mortgage with a larger one and getting cash upfront.  

Does my HELOC have to be the same bank as my mortgage? 

A HELOC is independent from your original home loan, so you can get one with any lender you choose.  

A HELOC as a second loan does add to your overall monthly mortgage payments and affects your total debt load, which could affect your financial strategy. 

Can I roll a HELOC into my mortgage? 

Yes, it’s possible to roll your HELOC into a single home loan. 

One popular method is to use a cash-out refinance on your primary mortgage to consolidate the balance on your HELOC.  

With cash-out refinancing, you essentially take out a new mortgage for a higher amount than your existing mortgage balance, allowing you to consolidate debt under a single, potentially lower-rate loan.  

Refinancing to include a HELOC can open the door to lower monthly payments, flexible loan terms or a lower interest rate tailored to meet your personal financial goals.  

How can I start the HELOC process today? 

The quickest and easiest way to get a HELOC and access your home’s equity is by talking with a lender.  

When you meet with a lender, they will typically require a home appraisal to determine what your home is worth.  

With a lender, you will fill out an application and submit documents such as your appraisal, tax returns and mortgage. After this, you will go through a closing process very similar to your original mortgage.  

Access the value of your home through a HELOC today by connecting with a lender. Start here! 

_{*Owning home equity line of credit (HELOC) is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw. This product is currently not offered in the states of New York, Kentucky, West Virginia, Delaware and Maryland. The HELOC requires you to pledge your home as collateral, and you could lose your home if you fail to repay. Property insurance is required as a condition of the loan and flood insurance may be required if your property is located in a flood zone. Borrowers must meet minimum lender requirements in order to be eligible for financing. Available for primary, second homes and investment properties only. Dependent on minimum credit score and debt-to-income requirements. Occupancy status, lien position and credit score are all factors to determine your rate and max available loan amount. Not all applicants will be approved. Applicants subject to credit and underwriting approval. Contact Owning for more information and to discuss your individual circumstances. Restrictions apply.} 

_{** Using funds from a Cash-out Refinance to consolidate debt may result in the debt taking longer to pay off as it will be combined with borrower’s mortgage principal amount and will be paid off over the full loan term. Contact Owning for more information.} 

_{Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.}   

_{All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Owning does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Owning. Owning, its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.}