HELOC on Primary Mortgage that is a recent rental?

[Ashton Fry]

Good evening!

I have a property in Charlotte, NC with a good chunk of equity that I would like to tap into. It was my primary residence that I was house hacking. I bought another property with a second home mortgage that I was using as a STR. I decided to move into this property back in June 2023. The Charlotte property is techinically no longer my primary.

Is it possible to tap into the Charlotte property's equity with a HELOC? Does anyone know of a bank that will do a HELOC on a second home?

Thanks!

[Matthew Kwan]

If you use HELOC, it will have to be in 2nd position, where you can pull up to 90% LTV based on what you own on your current mortgage. It is typically based on prime + index. HELOC or line of credit allows you to tap into your funds anytime you want and you can pay it back the used balance + interest. If you do not use the funds, you will just have to pay the interest every month to keep the line of credit active.

As for cash out, you can draw up to 80% for primary and use the funds to allocate/payoff your debt. It depends what the purpose are you trying to achieve when you're tapping/pulling the funds from your house.

@Albert Bui @Carlos Valencia