- A HELOC is a revolving line of credit secured by your home. You draw what you need and pay interest only on what you use.
- Lines from $25,000 to $750,000 on select programs; the largest lines need 700+ credit and more equity.
- Up to 85% combined loan-to-value (CLTV) on a primary home with 680+ credit, and up to 70% on second homes and rentals.
- Fixed-rate home equity loans (HELOANs) start at $50,000 on select programs.
- Funding in as few as 5 business days after you accept your offer on select digital programs. Standard files take about 2 to 6 weeks.
Line or loan: what's the difference?
Both are second mortgages. They sit behind the loan you already have, so your first mortgage, and its rate, stay exactly where they are.
A HELOC is a credit line. You get a limit, pull money when you need it during the draw period, and pay interest only on the balance you actually use. Most HELOCs are variable, tied to the Prime rate.
A home equity loan (HELOAN, also called a closed-end second) is one lump sum at a fixed rate with a set payment, like a regular mortgage. If you know the exact amount you need for one project or payoff, the fixed loan is usually the cleaner choice.
If today's rates are higher than the rate on your first mortgage, a second lien is usually where I start. A cash-out refinance would move your whole balance to today's rate; a HELOC or HELOAN only prices the new money.
What is the 5-Day HELOC?
Some of the lenders I work with run fully digital HELOCs: online application, automated home value, e-signing and electronic funding. When everything lines up, the money can fund in as few as 5 business days after you accept your offer.
On a primary residence, federal law gives you a 3-business-day right to cancel after signing, and funds release after that window. Not every property, state or file qualifies for the digital route; when it doesn't, I move you to a standard HELOC or HELOAN instead.
- Day 1: answer a few questions, apply online, and see your offer.
- Days 1 to 3: verify income and identity, value the home (usually automated), and confirm title.
- Signing: e-sign or sign with a notary, depending on the program and your state.
- Funding: as few as 5 business days after you accept your offer; primary homes fund after the right-to-cancel period.
Who it fits
- Homeowners with a low first-mortgage rate who don't want to give it up.
- Renovations, where a line lets you pay contractors as work gets done.
- Paying off high-interest credit cards or loans, with a real payoff plan.
- Investors who need quick access to cash for a down payment or repairs.
- Anyone up against a deadline, since the digital programs are built for speed.
How qualifying works
Equity sets the ceiling. Combined loan-to-value (CLTV) is everything you owe on the home, including the new line, divided by the home's value. Example: a $900,000 home with a $450,000 first mortgage at 85% CLTV leaves room for up to $315,000.
Credit sets the floor. Select programs start at 600 on a primary home (with smaller lines and lower CLTV below 680), and at 680 for second homes and rentals. Higher scores generally mean bigger lines and better pricing.
Income still matters. The lender checks that the new payment fits with your other debts; equity alone doesn't carry a file. The home is valued with an automated valuation or a full appraisal, and some programs can lend in second or even third position.
HELOC and home equity loan parameters
| HELOC | Home equity loan (HELOAN) | |
|---|---|---|
| Amount | $25,000 to $750,000 (largest lines need 700+ credit) | From $50,000 to $750,000 ($850,000 on select programs) |
| Credit score | 600 primary on select programs; 680 for 85% CLTV; 680 second home and investment | 620 on select programs at lower CLTV; 660+ on most |
| Max CLTV | 85% primary with 680+; 70% second home and investment | Up to 90% primary on select programs (700–720+, loans up to $350K); 80% at 660 |
| Occupancy | Primary, second home, investment | Primary, second home, investment |
| Rate | Variable, Prime-based | Fixed |
| Income documents | Standard income verification | Full doc; bank statement, P&L, 1099 or DSCR on select programs |
| Timeline | As few as 5 business days on select digital programs; 2 to 6 weeks standard | About 2 to 6 weeks |
Figures vary by lender and program and are subject to approval. Ownership seasoning requirements vary by lender.
HELOC vs. home equity loan vs. cash-out refinance
| HELOC | Home equity loan | Cash-out refinance | |
|---|---|---|---|
| How it works | Revolving line | Lump sum | New, larger first mortgage |
| Rate | Variable | Fixed | Fixed or adjustable |
| Your first mortgage | Untouched | Untouched | Replaced |
| Closing costs | Often lowest | Moderate | Full mortgage costs |
| Best for | Ongoing or uncertain costs | One known expense | Large amounts, or when today's rate beats your current one |
| Typical timeline | 5 business days to 6 weeks | 2 to 6 weeks | 30 to 45 days |
The trade-offs, honestly
I lay out the total cost of each option side by side, including doing nothing, so the decision is yours and the math is checkable.
- Your home is the collateral. Falling behind puts the house at risk.
- Variable rates move. If Prime goes up, so does a HELOC payment. If that would strain your budget, take the fixed loan.
- Payments rise when the draw period ends and principal kicks in.
- A lender can freeze or reduce a line if values drop or your credit changes. Don't treat it as a guaranteed emergency fund.
- The new payment counts against your debt-to-income on your next mortgage application.
Frequently asked questions
How fast can I get a HELOC?
On select digital programs, as few as 5 business days after you accept your offer, with primary homes funding after the 3-business-day right to cancel. Standard HELOCs and home equity loans usually take 2 to 6 weeks.
What credit score do I need?
Select programs start at 600 on a primary home with smaller lines and lower CLTV below 680. Second homes and investment properties generally need 680 or higher.
How much can I borrow?
Lines run from $25,000 to $750,000 on select programs, limited by your CLTV: up to 85% on a primary home with 680+ credit and up to 70% on second homes and rentals.
Can I get a HELOC on a rental property?
Yes, on select programs, typically up to 70% CLTV with 680+ credit.
Will a HELOC change my first mortgage?
No. It's a separate lien behind your first mortgage, which keeps its rate and payment.
Do I need an appraisal?
Many files use an automated valuation. Some properties or loan sizes need a full appraisal.
Related loan programs
Learn more
Timing depends on borrower qualifications, property and loan conditions; an appraisal may be required. Your home secures the loan and may be at risk if you do not repay. Rates, terms and repayment structures vary by product and lender. Subject to credit approval. Rates and program availability vary by state, property and lender. This is not a rate quote, a credit decision, an offer or a commitment to lend. Program restrictions apply. Larz Martin NMLS #2026245 · CA DRE #02241936 · Lumin Lending, Inc. NMLS #2716106 · CA DRE #02291443. Equal Housing Opportunity.
