What is a HELOC/HELOAN Refinance Loan?
A Home Equity Line of Credit (HELOC) or Home Equity Loan (HELOAN) refinance allows homeowners to tap into their home’s equity and access cash for home improvements, debt consolidation, education costs, investments, or other financial needs. These loan options provide flexible and affordable financing without requiring you to refinance your primary mortgage.
A HELOC (Home Equity Line of Credit) and HELOAN (Home Equity Loan) are two different ways to borrow against the equity in your home:
✔A HELOC works like a credit card, giving you a revolving line of credit that you can borrow from as needed. You only pay interest on the amount you use, making it a flexible financing option.
✔ A HELOAN is a fixed loan that provides a lump sum of cash up front, which you repay in fixed monthly installments over a set term. Both options allow homeowners to access funds without refinancing their first mortgage, making them ideal for those who already have a low interest rate on their existing mortgage but still want to access cash.
If you’re looking for a way to leverage your home’s value while keeping your existing mortgage intact, a HELOC or HELOAN might be the perfect solution.
How Does a HELOC/HELOAN Refinance Loan Work?
A HELOC or HELOAN refinance allows you to borrow against the equity in your home while keeping your existing mortgage.
Lenders determine your eligibility based on:
✔ Your home’s value and equity (usually requiring at least 15-20% equity).
✔ Your credit score and financial history.
✔ Your debt-to-income (DTI) ratio.
✔ How much you want to borrow relative to your home's value (Loan-to-Value ratio – LTV).
Once approved, you can either receive a lump sum (HELOAN) or access a revolving line of credit (HELOC) to use as needed.
Qualifications for a Non-QM Refinance Loan
✅Credit Score:
620+ required for most lenders. Higher scores (700+) qualify for better interest rates.
✅Debt-to-Income (DTI) Ratio:
43% or lower preferred, though some lenders allow higher DTI with compensating factors.
✅Loan-to-Value (LTV) Ratio:
Typically, 80-90% LTV (meaning you can borrow up to 80-90% of your home’s value, minus your existing mortgage balance).
✅Property Type Eligibility:
Available for primary residences, vacation homes, and investment properties.
✅Repayment Terms:
HELOC draw period: Typically, 5-10 years, followed by a repayment period of 10-20 years. HELOAN term: Fixed repayment over 5-30 years.
Is a Non-QM Refinance Loan Right for You?
A HELOC or HELOAN provides flexible and affordable access to home equity while keeping your primary mortgage intact.
HELOC & HELOAN Benefits at a Glance:
✅Borrow up to 80-90% of your home’s equity.
✅Lower interest rates than credit cards and personal loans.
✅Keep your existing mortgage while accessing cash.
✅Choose between a revolving credit line (HELOC) or a lump sum loan (HELOAN).
At Acre Lending Team, we specialize in helping borrowers refinance their homes with flexible Non-QM options. Whether you're self-employed, an investor, or have unique financial circumstances, we’re here to guide you through the process.
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