California Second Mortgages
Access your California home equity through second mortgages including HELOC with flexible draw periods, home equity loans with fixed rates and predictable payments, or Home Equity Investment with no monthly payments. Up to $500,000 available depending on equity and product type.
Check Your Equity OptionsCalifornia Home Value & Equity Check
Discover your California home value and determine how much equity you can access through HELOC, home equity loan, or Home Equity Investment.
Get Your California Home Value EstimateHome Equity Line of Credit (HELOC)
How HELOC Works: A HELOC is a revolving line of credit secured by your California home equity. Similar to a credit card, you can borrow, repay, and borrow again during the draw period (typically 10 years). You only pay interest on the amount you actually borrow, not the entire credit line. After the draw period ends, the repayment period begins (typically 10-20 years) where you can no longer borrow and must repay principal plus interest.
Loan Amounts: Up to 90% combined loan-to-value (CLTV) including your first mortgage. For example, if your California home is worth $800,000 and you owe $400,000 on your first mortgage, you could access up to $320,000 through a HELOC ($800,000 × 90% = $720,000 max total debt, minus $400,000 first mortgage = $320,000 HELOC).
Interest Rates: Variable rates tied to Prime Rate, currently 8-11% depending on credit score and CLTV. Rates adjust monthly or quarterly based on market conditions. Some lenders offer interest-only payments during draw period, while others require principal and interest payments from the start.
Credit and Income: Minimum 660 credit score, maximum 43-50% debt-to-income ratio. Full income documentation required including pay stubs, W-2s, or tax returns. Property appraisal required to verify home value and available equity.
Best For: Homeowners who need flexible access to funds over time for ongoing expenses like home renovations, education costs, or business investments. HELOC is ideal when you don't know the exact amount needed upfront and want to minimize interest costs by only borrowing what you need when you need it.
Home Equity Loan
How Home Equity Loans Work: A home equity loan provides a lump sum of cash secured by your California home equity. Unlike a HELOC's revolving credit, a home equity loan is a one-time disbursement with fixed monthly payments over a set term (typically 5-30 years). Interest rate is fixed for the life of the loan, providing payment predictability.
Loan Amounts: Up to 85% combined loan-to-value (CLTV) including your first mortgage. Slightly lower than HELOC maximums due to the lump sum nature and fixed rate. Using the same example as above, on an $800,000 home with $400,000 first mortgage, you could access up to $280,000 through a home equity loan ($800,000 × 85% = $680,000 max total debt, minus $400,000 first mortgage = $280,000 home equity loan).
Interest Rates: Fixed rates typically 8-10% depending on credit score, CLTV, and loan term. Rates are generally 0.5-1% higher than HELOC variable rates at origination, but provide protection against future rate increases. Longer terms (20-30 years) have slightly higher rates than shorter terms (5-15 years).
Monthly Payments: Fixed principal and interest payment for entire loan term. For example, a $100,000 home equity loan at 9% for 15 years would have a monthly payment of approximately $1,014. Payments remain constant regardless of market rate changes.
Credit and Income: Minimum 640 credit score, maximum 43-50% debt-to-income ratio. Full income documentation required. Property appraisal required to verify home value and available equity.
Best For: Homeowners who need a specific lump sum for a one-time expense like major home renovation, debt consolidation, or large purchase. Home equity loans are ideal when you want payment predictability and protection against rising interest rates.
Home Equity Investment (HEI)
How HEI Works: Home Equity Investment is NOT a loan. It's an equity sharing agreement where you receive a lump sum of cash in exchange for sharing a percentage of your California home's future value. Because it's not a loan, there are no monthly payments, no interest charges, and no debt added to your balance sheet. The equity sharing agreement is settled when you sell the home, refinance, or choose to buy out the investor's share.
Amount Available: Up to $500,000 depending on home value, existing mortgage balance, and equity position. HEI is typically available for homeowners with significant equity (40%+ equity recommended) who want to access that equity without monthly payment obligations.
No Monthly Payments: The most significant benefit of HEI is zero monthly payment obligation. Unlike HELOC or home equity loans that require monthly payments (typically $400-$1,200 per month on $100,000 borrowed), HEI requires no monthly payments. This frees up monthly cash flow for other expenses, investments, or quality of life improvements.
Term Length: HEI terms are designed to match your existing senior mortgage term, ranging from 10 to 30 years. This ensures the HEI agreement doesn't create a maturity mismatch with your primary mortgage. You can repurchase the investor's share at any time during the term with no early repurchase penalties.
No Income Requirements: HEI does not require income verification, employment verification, or debt-to-income calculations. This makes HEI accessible to retirees living on fixed incomes, self-employed individuals with complex tax situations, or anyone who doesn't want to document income. Qualification is based on home equity and property value, not income.
Best For: Retirees on fixed income who need equity access without monthly payments, homeowners with low mortgage rates who don't want to refinance, self-employed individuals who don't want to document income, or high DTI borrowers who can't qualify for traditional second mortgages.
Fixed-Rate HELOC
Hybrid Product: Fixed-rate HELOC combines the flexibility of a traditional HELOC with the payment predictability of a home equity loan. You have a revolving credit line during the draw period, but can convert borrowed amounts to fixed-rate installment loans at any time. This provides protection against rising interest rates while maintaining access to additional funds.
How It Works: During the draw period (typically 10 years), you can borrow funds as needed and make interest-only payments on the variable-rate balance. At any time, you can convert all or part of your borrowed balance to a fixed-rate installment loan with set monthly principal and interest payments. You can make multiple conversions over time as you borrow additional funds.
Interest Rates: Variable rate on unconverted balance (typically 8-11% tied to Prime Rate). Fixed rate on converted balances (typically 8-10% depending on credit score and market conditions at time of conversion). Fixed rates are locked for the chosen repayment term (5-30 years).
Loan Amounts: Up to 90% combined loan-to-value (CLTV) including your first mortgage, same as traditional HELOC. Minimum conversion amount typically $10,000-$25,000 depending on lender.
Payment Structure: During draw period, make interest-only payments on variable-rate balance plus fixed principal and interest payments on any converted balances. After draw period ends, all remaining variable-rate balance converts to fixed-rate repayment.
Best For: Homeowners who want HELOC flexibility but are concerned about rising interest rates. Fixed-rate HELOC is ideal for ongoing projects where you want to lock in rates as you borrow rather than taking a lump sum upfront or staying exposed to variable rates throughout the draw period.
Comparison: HELOC vs Home Equity Loan vs HEI
| Feature | HELOC | Home Equity Loan | HEI |
|---|---|---|---|
| Disbursement | Revolving credit line | Lump sum | Lump sum |
| Interest Rate | Variable (8-11%) | Fixed (8-10%) | No interest (equity sharing) |
| Monthly Payments | Interest-only or P&I | Fixed P&I | None |
| Income Verification | Required | Required | Not required |
| Max CLTV | 90% | 85% | Varies by equity |
| Term Length | 10 year draw + 10-20 year repayment | 5-30 years | 10-30 years (matches mortgage) |
| Best For | Flexible borrowing needs | One-time lump sum needs | No monthly payment needs |
Related Mortgage Resources
Mortgage Specialist
Kiyoshi Inui
Licensed Mortgage Loan Originator - NMLS 1173299
Kiyoshi specializes in California second mortgages including HELOC, home equity loans, fixed-rate HELOC, and Home Equity Investment. He analyzes your home value, existing mortgage, credit profile, and financial goals to recommend the optimal equity access solution and guide you through the entire process.
Schedule Consultation with Kiyoshi