Alright, welcome back to the Reliant Mortgage Solutions podcast! I’m Sean, and as always, I’m here with James. Today, we’re diving into a topic that comes up a lot with our clients—how to unlock your home’s equity, specifically the differences between a home equity line of credit known as a HeLOCK and a Home Equity Loan known as a HeeLOAN. James, you wanna kick us off?Yeah, absolutely. So, I get this question all the time—what’s the real difference between a HeLOCK and a Home Equity Loan? And honestly, it’s not as complicated as it sounds. A HeLOCK, or Home Equity Line of Credit, is basically a revolving line of credit. Think of it like a credit card, but it’s secured by your home. You can draw from it as you need, up to your approved limit, and you only pay interest on what you use.Right, and the key there is flexibility. With a HeLOCK, you’ve got options, fixed or variable rates, sometimes even interest-only payments during the draw period. It’s great if you’re not sure exactly how much you’ll need or when you’ll need it.Now, on the flip side, a Home Equity Loan—or HeeLOAN—is more like a traditional loan. You get a lump sum up front, fixed interest rate, fixed monthly payments. It’s ideal if you know exactly how much you need, like for a big remodel, medical expenses, or consolidating debt. But once you get that money, that’s it—if you need more, you’d have to apply for another loan.Exactly. So, if you want predictability—same payment every month, no surprises—a HELOAN is probably your best bet. But if you want flexibility, or you’re dealing with expenses that might change over time, a HeLOCK is the way to go. There’s no one-size-fits-all answer here. It really comes down to your comfort level with variable versus fixed payments, and whether you need funds all at once or over time.And just to add, both options usually have lower interest rates than personal loans or credit cards, so either way, you’re probably saving money compared to other types of borrowing. It’s just about matching the tool to your situation.So, let’s talk about something we get asked a lot—how can you access your home’s equity without having to refinance your primary mortgage? Because, let’s be honest, nobody wants to reset their whole loan just to get some cash out, especially if you’ve got a great rate locked in already.Yeah, and that’s where HELOCs and HELOANs really shine. Instead of doing a cash-out refi—which, as we’ve talked about before, means you’re replacing your entire mortgage, possibly at a higher rate—you can just add a second mortgage. I had a client who was up to his neck in credit card debt—which we all know comes with sky high interest rates. Instead of refinancing their whole mortgage, we set them up with a fixed-rate HeeLOAN. They paid off all their cards, locked in a much lower rate, and their monthly payments dropped. Plus, we got it funded in, I think, just under two weeks. No traditional appraisal needed, which was a huge relief for them.That’s awesome. I think a lot of people don’t realize how quick and straightforward the process can be. If you meet the credit requirements, you can often get the funds way faster than a full refinance. And with a HELOAN, you know exactly what your payment will be every month, which makes budgeting a lot easier—especially if you’re consolidating debt. I mean, who doesn’t want to swap out a bunch of revolving credit card payments for one simple, lower payment?Exactly. And with a HeLOCK, you’ve got even more flexibility. Maybe you want to pay off some debt now, but keep the rest available for emergencies or future projects. You’re not forced to use it all at once. It’s just a really smart way to leverage the equity you’ve built up, without messing with your main mortgage. And, you know, as we’ve said in past episodes, it’s all about finding the right fit for your situation. There’s no shame in asking for help to figure out what makes the most sense for you.Yeah, and if you’re not sure which route to take, that’s what we’re here for. We’ll walk you through the pros and cons, and help you make the best call for your goals.Alright, let’s shift gears a bit and talk about a specific type of home equity loan called a piggyback. This is one of those strategies that doesn’t get enough attention, but it can be a game-changer for a lot of buyers—especially if you’re bumping up against conventional loan limits or trying to avoid jumbo loan headaches.Yeah, piggyback loans are basically when you take out a second mortgage—either a HeLOCK or a HeeLOAN—at the same time as your first mortgage. In general- The approach is to take the loan amount up to the conventional loan limit and then use the HeLOCK or HeeLOAN to finance the additional loan balance. This is a great approach because you can avoid some of the stricter jumbo loan requirements, which can be a real pain—higher credit scores, bigger reserves, all that stuff. Piggyback loans just give you more options, and that’s what we’re all about here.Yeah, and if you’re not sure if a piggyback makes sense for you, or you want to talk through the numbers, just reach out. We love helping folks figure out the best way to structure their financing. Alright, I think that’s a good place to wrap up for today. James, always a pleasure talking through this stuff with you.Same here, Sean. And thanks to everyone for tuning in. If you’ve got questions about HELOCs, HeeLOANs, piggyback loans, or anything else mortgage-related, don’t hesitate to reach out. We’ll catch you next time on the Reliant Mortgage Solutions podcast. Take care, Sean!Take care, James. And thanks, everyone, for listening. We’ll see you on the next episode!

Episodes

Unlocking Your Home's Equity