Can You Get A HELOC On An Existing Mortgage?

Question

Hello BP Community,

I have a three family multifamily property in New Jersey. I bought it in 2019, lived in it for two years, refinanced it in 2021, and since then I have moved out and it is fully rented as an investment property.  Let's say it is worth around 650k, and I owe around 400k on a conventional mortgage at 3.1% interest.

Is it possible to get a HELOC on this property while keeping my current mortgage/interest rate?  I reached out to my lender and they made it seem like it would be a new mortgage at a much higher current rate, closing costs, etc in order to get a HELOC.  Is there another way to get a HELOC?

Please help me understand what options are possible. Thank you all.

Ned Carey · Answer

@Joseph Matarazzo this comes up a lot.  No you can't get a HOME equity line of credit for somthing that is not your home. So don't ask for that. you want a business line of credit secured by real estate. Same concept and esentially the same thing. But simply asking for the wrong name and you will get an answer of NO.

Daniel Vineis · Answer

Hey @Joseph Matarazzo my lender @Frank Avallone II does HELOCS on investment properties in New Jersey.

Matt Barth · Answer

I’m not certain but it might be worth checking with KeyBank. I thought they were doing these a while back. Either way if you can get one, it shouldn’t change your current rate. The HELOC should have separate terms. Someone else already mentioned it, but you might be able to get a line of credit secured by the property…

Carlos Ptriawan · Answer

Ridge Lending group recently announce they can do HELOC for rental but i never use them

Also there's another nationwide bank that can do HELOC on rental but your LTV should be below 50%, I guess if your LTV is 40%,cash out to 50% is possible.

BTw if you are the lender, are you willing to be on the second position of an investment property ? I guess it would be no except if the interest rate is double digit LOL

another way you can do is to just move back to that primary, use the address in IRS repor as primary (not on schedule E) and just apply for HELOC.

Derek Brickley · Answer

Hi Joseph!

In many cases HELOC's on investment properties are not doable for most lenders.  They most likely are looking to refinance you out of your current mortgage.  David mentioned it on the podcast a week ago or so, but it is very difficult to find a lender who will do that.  My recommendation is to reach out to your local credit unions and ask, and don't let the first "No" stop you from looking!

Account Closed · Answer

@Christopher Harris

Stefani Mokris · Answer

Thank you for this question! I always wondered if anyone in NJ would do a HELOC on a rental property. There are so many helpful answers here!

May I add using your rental as a collateral for a secure private lending as a creative possibility? But private lending tends to have higher interest and shorter terms. So I could be used depending of what your goals are.

Joseph Guzzardi Jr · Answer

@Joseph Matarazzo I think the key question is what are the funds actually needed for. If it is to purchase another property, there are other ways to access capital, including partnering with others. If its for a rehab project, consider opening up a 0% int credit card if you can be diligent in watching and understanding those costs. Can also consider Biz LOC if you have an LLC thats open for a bit.

Chris Seveney · Answer

@Joseph Matarazzo

I have a private lender who will lend (2nd not HELOC) on investment properties

2-4 points and 12-15% interest

It’s expensive but it’s available.

Can You Get A HELOC On An Existing Mortgage?

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