Can you have multiple home equity loans at once?

Question

So I have a HELOC on my primary home. We recently bought a house for cash and I plan to fix it and move into it and do a home equity loan to tap into my equity. i plan to keep my old home (the one with the HELOC) as a rental. I have asked the lender I have the HELOC with if this is OK and she said yes, but I would need to close my HELOC bc I can't have more than one home equity product at a time.

Is this the end-all-be-all or is it possible to have multiple?

Chris Mason · Answer

Barring Texas having wonky HELOC and cash out refi rules, yes you certainly can, if the bank will go for it, which some will do. I see it not infrequently in California.

@Andrew Postell is in Texas (& otherwise a good resource for you as a Texas Realtor anyways), the one state in 50 known for having unique state specific wonky rules regarding HELOCs and cash out refis. Andrew, do you see folks with multiple rental properties that have HELOCs in Texas?

Andrew Postell · Answer

@Miles Stanley as @Chris Mason mentioned "cash out" rules are so crazy in Texas that some lenders just won't mess with them.  And on this one I'm not going to know ALL the rules since we are speaking on HELOCs.  Traditional Texas Cash Out loans I can speak to all day.  Even getting a Line of Credit on a Texas investment property...got you covered.  But this scenario, well, let's try.

You'll need to go to another lender for your next primary home HELOC.

You might be required to live there for 12 months to get a HELOC.

You should speak with a smaller bank first.  Expect to call around to ALL the banks in your area.  20 different calls is a good start.

If you leave your last primary home, ask your HELOC bank what they will do once you remove your homestead exemption.  Chances are they will close the HELOC and modify it into a 20 year loan.  Ask first just to make sure.

Again, I speak definitively here but I think these might be the situations that you will face.  Good luck!

Miles Stanley · Answer

@Joseph Crawford

i made it clear that the equity products we be on 2 different properties and she was insistent that it wasn't possible.  Maybe THEY just won't do it, I'll need to speak to other lenders apparently.

Joseph Crawford · Answer

@Miles Stanley not on the same equity but otherwise yes.

Can you have multiple home equity loans at once?

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