Use Your Equity Without Touching Your First Mortgage
If your first mortgage is at a rate you would never give up, a home equity line or a fixed second loan lets you borrow against the house and leave that first loan exactly where it is.
Home equity, three ways: a regular full-doc HELOC on the home you live in, an investor second that leaves your low-rate first mortgage alone, or an alt-doc line qualified on bank statements or rent instead of tax returns. Lines and seconds from $50,000 to $1,000,000, up to 90% of combined value on a primary home.
The short answer
You have more home equity options than the big bank menu suggests. Lawton Building and Loan runs home equity lines of credit (HELOCs) and fixed-rate closed-end second loans for three kinds of borrowers: regular homeowners who qualify the standard full-doc way, investors who want to pull equity out of rental properties without refinancing them, and self-employed or investor borrowers who qualify on bank statements, a P&L, or the rent the property brings in. Amounts run from $50,000 up to $1,000,000 on most programs, higher on a few, and on a primary home the combined loans can reach up to 90% of the home’s value on the right file. The regular full-doc HELOC is one of the easiest, fastest, lowest-work loans we close, and the regular lane is more flexible than most people expect: credit scores down to 600 fit on the right program, and one regular program needs no appraisal at all on loans of $500,000 or less.
The three ways to tap equity
1. Regular borrower HELOCs (full doc, the home you live in)
The straightforward one. You qualify the way you did for a regular mortgage, with pay stubs, W-2s, and tax returns, and you get a revolving line of credit secured by your home. One of our regular programs can even verify your income and assets straight from your bank accounts through a secure link, skipping most of the paper chase. Draw what you need, pay interest on what you have drawn, and draw again as you pay it down. Homeowners use these for remodels, debt consolidation, tuition, a business opportunity, or just a safety net sitting there ready.
What the regular lane actually looks like right now:
- Amounts from $25,000 to $750,000 on the standard second-lien programs, with one first-lien line program running from $50,000 up to $3,000,000.
- Combined value: most regular programs reach 80% of your home’s value counting both loans, and select programs go to 88% or 90%, with the higher reaches tied to stronger credit and smaller loan sizes.
- Credit scores down to 600 fit on the right program. The best combined-value numbers sit at higher scores, as you would expect.
- No appraisal on loans of $500,000 or less with one program, which cuts cost and time.
- Draw periods run from 3 to 10 years depending on the program, with total terms up to 30 years. Some programs offer interest-only draws.
- Speed: one program approves in minutes and funds in about five business days in most states. That particular fast track does not run in Texas, but Texas files still close on a normal, simple schedule.
A Texas note, because it matters here: Texas has its own home equity rules, and a few national programs cap Texas loans lower (one second-lien program tops out at $400,000 in Texas) or skip Texas second loans completely. Every route described on this page is one that works in Texas.
2. Investor HELOCs and closed-end seconds
If you own rentals, this is how you put sleepy equity to work without disturbing the first mortgage on the property. Two shapes:
- Investor HELOCs on rental properties, including properties held in an LLC.
- DSCR closed-end seconds, a fixed second loan qualified on the rent the property brings in rather than your personal income, with combined value up to 80% on strong files and loan amounts from $75,000 to $500,000.
On the line side, investor seconds reach 75% of combined value on an income-based route and 70% on a rent-based (DSCR) route at loan sizes up to $500,000, and DSCR-based investor lines work down to a 640 score on 1 to 4 unit properties on one program. Investors use these to fund the next down payment, cover a rehab overage, or consolidate more expensive debt, all while the original first loan and its rate stay untouched.
Texas investors, one caution: several national investor-second programs do not lend in Texas at all, and a few cap Texas differently. We keep a short list of the investor second and DSCR second programs that do run in Texas, and that is where we will steer your file.
3. Alt-doc HELOCs and seconds (bank statement, P&L, DSCR)
Built for the self-employed and for investors whose tax returns do not tell the real story. Instead of returns, these programs qualify you on:
- 12 months of personal or business bank statements
- 1099 income
- A profit and loss statement
- Asset utilization, qualifying off what you have saved and invested
- DSCR, qualifying off the property’s rent
Alt-doc seconds and lines are available on primary homes, second homes, and investment properties, up to 90% of combined value and up to $1,000,000 on the second-loan side, with lines up to $1,000,000. Several of these programs require no reserves, one bank statement program even qualifies borrowers with no income at all up to 80% of combined value, and a fixed-rate alt-doc second can close in about two to three weeks. Score floors on the alt-doc side run from about 640 to 680 depending on the program and doc type, and DSCR seconds can work with a rent ratio right at 1.00. One Texas note: at least one alt-doc second program caps Texas at 80% of combined value instead of its usual 85%, which is already priced into the numbers we will quote you.
HELOC or closed-end second, which one fits?
- Pick a HELOC when the need is open-ended or spread over time: a remodel in phases, a line you want standing by, draws you will repay and reuse. You pay interest only on what you have actually drawn.
- Pick a closed-end second when you know the exact amount: one project, one purchase, one payoff. It is a fixed loan with a set payment, and the amount lands all at once.
Not sure? That is a ten-minute conversation, and we will run both shapes against your numbers.
Who this fits
- Homeowners with a low-rate first mortgage they do not want to refinance away.
- Investors sitting on equity in paid-down rentals who want the next deal funded.
- Self-employed borrowers whose returns understate what they actually earn.
- Anyone carrying high-interest debt against a house with real equity in it.
The honest part
A second loan or line sits behind your first mortgage, so lenders price and underwrite it on the combined picture: total owed against the home’s value, your credit, and your ability to carry both payments. Strong files see the best numbers, up to the 90% combined figure. Weaker credit, higher combined balances, or unusual properties land lower, and some files fit a second while others honestly fit a refinance better. We will tell you which one you are before you spend money finding out.
How it works
- Call or text (817) 862-6922, or start at the Get Prequalified link below. Tell us the property, roughly what you owe, and what the money is for.
- We match the shape to the file: line or fixed second, full doc or alt doc, and we give you real numbers for each route that fits.
- Close and draw. Regular full-doc HELOCs are among the fastest, simplest closings we do, alt-doc fixed seconds can close in about two to three weeks, and the investor routes are built to move without a mountain of paperwork.
FAQ
Will a HELOC or second loan change my first mortgage? No. Your first mortgage stays exactly as it is, same rate, same payment. The line or second loan sits behind it.
How much can I borrow against my home? Programs run from $50,000 to $1,000,000, with amounts as low as $25,000 on one regular program and as high as $3,000,000 on one first-lien line program. How much of your value you can reach depends on the program and the file: most regular programs reach 80% of combined value, select programs reach 88% to 90% on a primary home, and DSCR investor seconds reach up to 80% combined.
I am self-employed and my returns show low income. Can I still get a HELOC? Very often, yes. Bank statement, 1099, P&L, and asset-based programs exist for exactly that situation. That is the alt-doc family above.
Can I get a HELOC on a rental property? Yes. Investor HELOCs and DSCR seconds are built for rentals, including properties vested in an LLC.
Do I have to occupy the home? No. Primary homes, second homes, and investment properties all have routes. The regular full-doc HELOC is for the home you live in; the investor and alt-doc families cover the rest.
What does it cost to find out? A phone call. We will tell you which family you fit, the amount range that is realistic, and your total estimated out of pocket before you commit to anything.
Start here
Call or text (817) 862-6922, or get started online.
Educational information only, not a commitment to lend. All loans are subject to credit approval, and programs change.
Joel Lawton, Lawton Building and Loan, NMLS #380245
Ready to see if you qualify?
or call (817) 862-6922, for a free consultation today.