Keep your first mortgage. A HELOC may open up your home’s equity.
A home equity line of credit (HELOC) is a separate second loan that sits behind the first mortgage you already have. If you want to keep that first mortgage’s rate and terms, a HELOC may let you borrow against your equity for a home project or other plans without replacing it.
Availability depends on your state, lender and program. Ask Mary Ann about options for your property.
Your home secures a HELOC, and missed payments can lead to foreclosure. Approval, rate and closing costs depend on qualification. This page does not quote rates or promise approval or savings.
Mary Ann Garcia BergesBroker/Owner, MyAgent Lending Group · MLO NMLS #309639
How a first mortgage and a second loan work together
Think of your home’s value in layers. Your first mortgage is the bottom layer. A HELOC or other second loan is a new, separate layer on top of it. The rest is equity you keep.
- Your first mortgage stays in place. Its existing terms still apply, including any scheduled rate or payment changes.
- The second loan is recorded behind it. Both loans are secured by the same home. If the home is sold or refinanced, the first mortgage is paid off first.
- You make two payments. One for the first mortgage and one for the second loan.
- How much you may borrow depends on several things: your home’s value, what you still owe, your credit and income, and the lender’s limits.
HELOC, fixed-rate second, or cash-out refinance
Each one can be the right tool. The difference is what happens to your first mortgage, how you receive the money and how the rate behaves.
| Topic | HELOC | Fixed-rate second mortgage | Cash-out refinance |
|---|---|---|---|
| Your first mortgage | Stays in place | Stays in place | Replaced by a new, larger loan |
| How you get the money | A line of credit you draw from as needed during the draw period | One lump sum at closing | One lump sum at closing |
| Rate | Usually variable, so the payment can go up or down | Usually fixed for the loan term | A new rate on the whole balance, fixed or adjustable |
| Payments | Second payment based on what you have drawn; rules differ between the draw and repayment periods | Second payment on a set schedule | One payment |
| Can fit when | Costs come in stages, or you want access to funds over time | You know the amount and want a predictable payment | A new rate is comparable to or better than your current one, or one loan matters most to you |
Fixed-rate second mortgage availability varies by state and lender. Ask Mary Ann what is available for your property.
Before you decide
- Your home is the collateral. If you cannot repay a HELOC or second mortgage, you could lose your home to foreclosure.
- Closing costs and fees can apply, such as appraisal, title and lender fees. Ask for a written estimate.
- Qualification is required. Credit, income, home value and your existing loan balance all matter.
- Total interest adds up. Borrowing over many years, or making interest-only payments, can mean paying more total interest than you expect. Compare total cost, not just the monthly payment.
- Variable rates change. A HELOC payment can rise when rates rise.
Planning a home project?
Renovations rarely cost everything on day one. A deposit, then materials, then the next phase. A HELOC can follow that rhythm: you draw what you need as invoices arrive, and interest is generally charged on the amount you have drawn rather than the full line.
A few habits keep a project loan in proportion:
- Get written contractor estimates before deciding how much to borrow.
- Leave room for surprises, but avoid borrowing much more than the project needs.
- Plan for a higher payment if rates rise.
- Do not count on a project raising your home’s value by any set amount.
Talk it through with Mary Ann
Mary Ann Garcia Berges is the Broker/Owner of MyAgent Lending Group, with more than 30 years of real estate and mortgage experience. She explains the options first, including when a HELOC is not the best fit, so you can decide with the full picture.
- Mary Ann Garcia Berges: DRE #01162792, MLO NMLS #309639
- MyAgent Lending Group: DRE #02152913, NMLS #2255853
- C2 Financial Corporation: BRE #01821025, NMLS #135622
Request a callback
Tell Mary Ann how to reach you. A short note is enough; she will ask the right questions.
Please do not include Social Security numbers, account numbers, balances, income figures or documents. This form is not a loan application and does not check your credit.
Prefer to talk now? Call (310) 218-3466
Common questions
Will a HELOC change my first mortgage?
No. A HELOC is a separate loan and does not replace your first mortgage. Your first mortgage continues under its existing terms, including any scheduled rate or payment changes. The HELOC adds a separate payment.
Is a HELOC rate fixed or variable?
HELOC rates are usually variable, so the payment can change over time. A fixed-rate second mortgage (sometimes called a home equity loan) is paid out as one lump sum and usually has a fixed rate. What is available depends on your state, lender and program.
What does a HELOC cost?
Besides interest, there can be closing costs and fees, for example an appraisal, title and recording costs, or lender fees. They vary by lender and program, so ask for a written estimate before you decide.
How much could I borrow?
It depends on your home’s value, what you still owe, your credit and income, and the lender’s limits. No amount can be promised until a lender reviews your situation.
What happens if I cannot make the payments?
Your home is the collateral, so missed payments can lead to foreclosure. Lenders can also freeze or reduce a line in some situations, such as a significant drop in home value. Borrow an amount you are comfortable repaying even if rates rise.
Is a cash-out refinance ever the better choice?
Yes, it can be. If a new rate is comparable to or better than your current one, or you prefer a single loan and payment, a refinance may fit better. Mary Ann can walk through both.
Is this available in my state?
Availability depends on your state, lender and program. Ask Mary Ann about options for your property. Her license details are listed on this page.
Does the callback form apply for a loan?
No. It only sends your contact details and optional note to Mary Ann so she can reach you. It does not check your credit and is not an application.