Home Equity Loan — A Fixed Second Behind the Rate You Already Have

Your Answer Right Here

Home Equity Loan: Direct Answer

A home equity loan is a second mortgage that pays you one fixed sum at closing and leaves your first mortgage exactly where it is. Lenders call it a closed-end second, and closed-end is the word that matters: the money is disbursed once, in full, on the day you sign. No draw period. No revolving balance to manage.

You repay it on its own fixed schedule of ten, twenty or thirty years, alongside the mortgage you already have. The rate on a second lien runs higher than a first-mortgage rate, but it applies only to the new money. That is the whole reason this beats refinancing when your first loan is sitting on a rate you would hate to give up.

We place these in New Jersey, Connecticut and Florida. Call 888.958.5382 or apply free and a licensed loan officer will price yours.

Before You Read the Numbers

Where We Place a Home Equity Loan — and Where the Terms Differ

Second mortgages are not one national product. They are individual lender programs, and lenders choose which states they lend in.

We arrange second mortgages in all three states we are licensed in: New Jersey, Connecticut and Florida. What changes between them is which lender the file goes to, and that changes the guidelines. The rate sheet further down this page — the credit scores, the combined loan-to-value ceilings, the loan minimum — is the program we use in Connecticut and Florida. That particular lender does not lend in New Jersey.

If Your Property Is in New Jersey

New Jersey second mortgages go to a different source, so the numbers in the Connecticut and Florida table do not describe your file and we are not going to pretend they do. What we can tell you before you apply is the shape of it: it is still a fixed closed-end second, still funded in full at closing, still behind a first mortgage that stays untouched. What you can borrow comes down to your credit, your equity and the program the file fits. That is a five-minute conversation, and it costs nothing to have it. Our office is in Ridgefield, so New Jersey is not an afterthought here — it is where we sit.

Connecticut and Florida Program

Home Equity Loan Scores, Loan Size and CLTV

Maximum combined loan-to-value moves with three things at once: how much you are borrowing, your credit score, and how you document income. Below is a primary residence on full documentation.

Maximum combined loan-to-value on a primary residence, Connecticut and Florida, on our standard full-documentation tier. A second full-doc tier prices differently and runs lower ceilings; second homes, investment properties and every alternative-documentation path have their own grids below these numbers. Two-to-four unit properties cap at 75%. A declining market reduces the ceiling by five points. Minimum loan $75,000. No single file gets every best case here — which tier you land in depends on the whole picture. Guidelines shown were checked against the lender matrix in August 2026 and are subject to change.

How the Loan Is Built

How a Home Equity Loan Differs From a HELOC and a Cash-Out Refinance

These three all reach the same equity and they behave nothing alike. A cash-out refinance replaces your first mortgage with one bigger loan, so whatever rate you are carrying today disappears and the new rate applies to the entire balance. A line of credit leaves the first alone but revolves — you draw as you go, and the rate moves with Prime for the life of it. A closed-end second also leaves the first alone, but it hands you everything at closing at a rate that is fixed from day one and never moves again.

The practical test is usually the rate on your existing first mortgage. If you are sitting on something in the threes or low fours, refinancing the whole balance to reach equity is expensive in a way that is easy to miss, because the cost is buried in the payment on money you had already borrowed. Compare the blended monthly payment across both loans, not the two interest rates side by side — two rates tell you almost nothing on their own. The Consumer Financial Protection Bureau’s explanation of home equity borrowing is a fair neutral read before you commit to any of the three.

How the Fixed Rate Works

The rate is set at closing and stays there. You qualify at that same note rate, and the payment that gets used in your debt ratio is the fully amortizing payment — principal and interest, not an interest-only figure. There is no draw period to end and no payment shock waiting five years out, which is the trade you are making against a line of credit: less flexibility, more certainty. If you know the number you need, that trade is usually worth taking.

How Self-Employed Borrowers Qualify

You do not need tax returns. In Connecticut and Florida the same program runs on twelve months of personal or business bank statements, on a profit-and-loss statement backed by three months of business banking, on 1099s as the only income source, or on liquid assets converted to an income stream. A written verification of employment works for wage earners whose employer is slow with paperwork. Documenting income this way runs on its own combined loan-to-value grid, set below the full-documentation columns in the table above — and one-year self-employed, written-verification and 1099 files give up a further five points on top of that. That is the honest price of not producing returns, and it is worth knowing before you assume the table applies to you.

Full Picture

What You Need to Qualify

Four things decide a second mortgage file. These figures describe the Connecticut and Florida program; New Jersey guidelines are quoted individually.

One thing worth knowing before you sign, because it surprises people eighteen months later: once a second lien is recorded, refinancing your first mortgage means asking the second lender to subordinate — to formally agree to stay in second position behind the new first. It is routine and it is usually granted, but it is a request, not a right, and it takes time. Ask what the subordination policy is while you are still deciding, not when you are trying to close a refinance.

Before You Start

What Happens After You Apply

1. You send the application

   A few minutes online. No documents at this stage.

2. A licensed loan officer calls you

   Someone on our team covering your state, with your state’s actual terms.

3. We order the appraisal and pull credit

   Only once you have decided to move forward.

4. You close and the funds are wired

   The full amount at once. Your first mortgage payment does not change.

The appraisal is what sets the pace. Every home equity loan needs a full one, so unlike a small line of credit there is no automated valuation to fall back on and no way to skip the appraiser’s calendar. Two things hold files up more than anything else. An appraisal that lands under what the homeowner expected moves you down a combined loan-to-value tier and shrinks the loan. A first mortgage that closed less than six months ago has not seasoned yet and cannot take a second behind it. Both are worth checking before you apply rather than three weeks in.

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Common Questions Answered

Frequently Asked Questions — Home Equity Loan

Related Resources

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