Keep your current first mortgage
Your first mortgage can stay in place. This may matter if you want to keep its current rate and terms. Compare the combined payments and total costs of both loans before deciding.
HELOC & Closed-End Second Mortgages
Need funds without replacing your first mortgage?
A second mortgage may let you borrow against your home's equity while keeping your existing first mortgage. Explore two options: a HELOC credit line or a one-time Closed-End Second Mortgage.
Your home's value minus what you still owe on loans secured by it. Your available loan amount depends on lender requirements and your qualifications; it is not automatically the full amount of your equity.
Why consider a second mortgage?
Choose how you receive the money
A HELOC lets you borrow over time during its draw period. A Closed-End Second provides one lump sum. The right fit depends on when you need the money and how you plan to repay it.
Two ways to borrow against your equity
A reusable credit line
HELOC
Draw funds as needed during the borrowing period, within your available limit. As you repay, credit becomes available again, subject to the loan terms.
May suit expenses that happen in stages, when you do not need the full amount at once.
Rates are usually variable, so payments can change. Payments may rise after the draw period ends. Ask about minimum withdrawals and any limits on future borrowing.
One lump sum, an agreed repayment plan
Closed-End Second Mortgage
Receive the agreed loan amount once, then repay it on a set schedule. Amounts you repay cannot be drawn again.
May suit a one-time expense when you already know how much you need.
Review the rate, monthly payment and repayment term. Confirm whether the rate can change and whether any large final payment is required.
Is it worth exploring for your situation?
Start with your property value, existing mortgage balance, the amount you need and your repayment budget. East Star can review the available options with you. Having equity alone does not guarantee approval.
Understand the costs and risks
Compare all fees
Ask about closing and appraisal costs. For a HELOC, also check annual, inactivity and early-closure fees. Fees vary by lender and program.
Plan for the added payment
A second mortgage adds borrowing on top of your first mortgage. Keeping a low first-mortgage rate does not by itself mean lower total costs. Compare fees, total interest and the time needed to repay.
Your home is the security
If you cannot repay, you could lose your home. A HELOC lender may also reduce or freeze further borrowing in certain circumstances, including a significant fall in property value or a material change in your finances.
Talk through your options with East Star
Tell us how much you hope to borrow and what you want to keep about your current mortgage. We can explain the next steps and the information needed for a review.
General information only. This is not a commitment to lend. Approval, available equity, loan amounts, rates, fees and terms depend on borrower qualifications, property review and the selected program.
