HELOC on Primary Mortgage that is a recent rental?

Question

Good evening!

I have a property in Charlotte, NC with a good chunk of equity that I would like to tap into. It was my primary residence that I was house hacking. I bought another property with a second home mortgage that I was using as a STR. I decided to move into this property back in June 2023. The Charlotte property is techinically no longer my primary.

Is it possible to tap into the Charlotte property's equity with a HELOC? Does anyone know of a bank that will do a HELOC on a second home?

Thanks!

Matthew Kwan · Answer

If you use HELOC, it will have to be in 2nd position, where you can pull up to 90% LTV based on what you own on your current mortgage. It is typically based on prime + index. HELOC or line of credit allows you to tap into your funds anytime you want and you can pay it back the used balance + interest. If you do not use the funds, you will just have to pay the interest every month to keep the line of credit active.

As for cash out, you can draw up to 80% for primary and use the funds to allocate/payoff your debt. It depends what the purpose are you trying to achieve when you're tapping/pulling the funds from your house.

@Albert Bui @Carlos Valencia

As for cash out, you can draw up to 80% for primary and use the funds to allocate/payoff your debt. It depends what the purpose are you trying to achieve when you're tapping/pulling the funds from your house.

@Albert Bui @Carlos Valencia

Jeff Prow · Answer

Yes it is possible to put a heloc on the investment home. There are some portfolio products that could access the needed equity. DM me if you would like additional information.

Kasey Hardt · Answer

Hi Ashton!

Congrats on your house hacking! I did the exact same thing (bought, house hacked, bought another, rented that one). I attempted to take a HELOC on my rental that was once my primary and the bank told me I could not. However, I do believe different banks offer different products and I have heard of some banks doing HELOC on rental properties now (more expensive). I would try shopping around, good luck!

Ko Kashiwagi · Answer

Hi Ashton,

A HELOC is typically for a primary, so most lenders wouldn't be able to give a line of credit on your Charlotte property. You could seek a business line of credit using the property as a collateral, but most lenders don't do this - you may be able to find one if you talk to local banks or credit unions.

Alternatively, you could get a second position loan on it, like a HELOAN. This would be a close-ended mortgage, so you wouldn't be able to pull cash in and out multiple times like a credit card. Refinancing is another option too. Note that HELOCs and 2nd mortgage loans have typically high rates.

Dave Skow · Answer

@Ashton Fry- there are several lenders / banks offering HELOCs on rentals and / or 2nd homes ...SPRINGEQ is one .....check with your lender contacts and also with the banks you do business with or banks / credit unions close to the proeprty- good luck

Brayden Hrycko · Answer

Hello @Ashton Fry,

I have several options for you. Lets connect so I can learn more about your secnario.

Derek Brickley · Answer

Hey Ashton!

Yes we could potentially do a HELOC, but as mentioned the rates/fees on a second home/investment HELOC will be higher just as a disclaimer. If it might make sense to work through some options, feel free to reach out and would be happy to schedule a time.

HELOC on Primary Mortgage that is a recent rental?

HELOC on Primary Mortgage that is a recent rental?

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