How much can I borrow with a HELOC on a second home?

You can borrow from $25,000 up to $750,000 depending on your equity, credit score, and the lender. Most second home HELOCs allow a combined loan to value of 70 to 80 percent. For example, if your second home is worth $500,000 and you have a $200,000 mortgage on it, at 80 percent CLTV you could access up to $200,000 in a line of credit.

HELOC on a Second Home | Bonelli Financial Group

Q: Can you get a HELOC on a second home?

Yes, you can get a HELOC on a second home or vacation property. The requirements are stricter than on a primary residence. You generally need a minimum 680 credit score, combined loan to value of 70 to 80 percent, and a clean mortgage payment history on all properties for the past 24 months. Bonelli Financial Group works with multiple wholesale lenders to find the right HELOC for your second home.

Q: What credit score do I need for a second home HELOC?

Most lenders require a minimum credit score of 680 for a HELOC on a second home. A score of 740 or higher will unlock better rates, higher loan amounts, and more lender options. The credit score used is typically an Experian FICO 9 score.

Q: Can I get a HELOC on a second home in Texas?

No, second home HELOCs are generally not available for properties in Texas due to the state's specific home equity lending laws. Texas home equity products are restricted to primary residences under Texas 50(a)(6) guidelines. If your second home is in another state we are licensed in, we can help.

Q: Does my second home need to be in the same state as my primary residence?

No. As long as your second home is in a state Bonelli Financial Group is licensed in, we can help you regardless of where your primary residence is located. We are licensed in Arizona, California, Colorado, Florida, Idaho, New Mexico, Ohio, South Carolina, and Texas.

A lot of homeowners do not realize you can get a HELOC on a second home. Most people assume home equity lines of credit are only available on the house they live in full time, but that is not the case. If you have built up equity in a vacation home, a lake house, or another property you own, there are options to tap into that equity without touching your primary residence.

At Bonelli Financial Group we work with multiple wholesale lenders and we can help you find the right HELOC for your second home. Here is everything you need to know.

Looking for a HELOC on your primary residence instead? See our main HELOC page for primary residence options.

Can You Get a HELOC on a Second Home?

Yes, but the requirements are a bit stricter than on a primary residence. Lenders view second homes as slightly higher risk because if a borrower runs into financial trouble, they are more likely to stop paying on a property they do not live in full time before they stop paying on their main home. Because of that the credit score minimums are higher, the maximum loan to value is lower, and fewer lenders offer this product at all. That is where having a broker who works with multiple wholesale lenders really matters. We can shop your scenario across lenders and find the best fit.

Second Home HELOC Requirements

Credit Score: Most lenders require a minimum of 680 for a second home HELOC. That is compared to 640 or lower on a primary residence. The stronger your credit score the better your rate and the more you can potentially borrow.

Loan to Value (CLTV): On a primary residence you can sometimes borrow up to 85% combined loan to value. On a second home that gets pulled back. Depending on your credit score and lien position you are generally looking at 70% to 80% CLTV. So if your vacation home is worth $500,000 and you have a $200,000 mortgage on it, at 80% CLTV your maximum line of credit would be around $200,000.

Loan Amounts: Depending on the lender, second home HELOCs are generally available from $25,000 up to $500,000 or higher depending on your equity and credit profile.

Debt to Income: You need to be under 45 to 50% DTI depending on the lender. They are going to count both your primary mortgage payment and the second home mortgage in that calculation so make sure you know your full debt picture going in.

Property Eligibility: The property has to be a true second home meaning you personally use it for part of the year. It cannot be a full time rental or an investment property, that is a different product with different guidelines. The property also needs to be a single family residence, townhome, PUD, condo, or duplex in most cases. There are lenders that go up to 3 to 4 unit properties as well.

Reserves: Expect lenders to want to see reserves on both properties. Having several months of mortgage payments sitting in an account for both your primary and second home is something underwriters look at closely on these deals.

Housing Payment History: On second home HELOCs lenders want to see no late payments in the last 24 months on any mortgage, primary or second home. This is one that catches people off guard so it is worth knowing upfront.

One Thing to Know About Texas

If your second home is in Texas, the HELOC rules are different. Texas has very specific home equity lending laws and second home and investment HELOCs are not available through most programs in that state. Primary residence only in Texas. If you have a Texas primary residence and want to tap equity there, we can walk you through the Texas 50(a)(6) options. If your second home is in another state we service, we can absolutely help.

How Much Can You Borrow?

Here is a quick example:

Second home value: $500,000 Existing mortgage on second home: $200,000 At 80% CLTV the max line would be: $200,000 At 70% CLTV the max line would be: $150,000

Your actual approval depends on your credit score, which lender we place you with, and the lien position. A 680 credit score gets you one set of options, a 740 or above opens up better terms and higher loan amounts. We run the numbers for you before you ever go through a full application.

What Can You Use the Money For?

One of the best things about a HELOC is flexibility. You are not locked into one use for the funds. The most common uses we see on second home HELOCs are renovating the second property itself, buying an investment property or funding a down payment on another purchase, consolidating higher interest debt, covering business expenses, or just having a line of credit available without selling anything or refinancing your primary mortgage.

In a market where a lot of people locked in low rates on their primary home, a HELOC on a second property is one of the few ways to access cash without giving up a great rate on your main house.

How the Draw Works

Once approved you get access to your full credit line. You can draw funds as you need them, make payments, and draw again. Most lenders have a draw period of 3 to 5 years depending on your loan term, and a minimum draw of $500. There are no prepayment penalties and no out of pocket costs at closing on most programs. The origination fee is rolled into the loan amount so you are not writing a check to close.

Funding on a second home HELOC is typically faster than a primary residence because there is no rescission period. Most borrowers can be funded within 5 business days of completing their notary.

Second Home HELOC vs Primary Residence HELOC

The product works the same way. You get a revolving line of credit, a draw period to access funds, and a repayment period after that. The differences come down to qualifying. You need a stronger credit score, a lower CLTV, and a clean payment history on all mortgages. Rates are also typically a bit higher on second homes than on primary residences, though still much lower than personal loans or credit cards.

Is This the Right Move for Your Situation?

It depends on what you are trying to accomplish and how much equity you have in the property. If you need a one time lump sum for something specific, a home equity loan with a fixed rate and fixed payment might actually be the better fit. If you want ongoing access to funds that you can draw on and pay back over time, the HELOC is usually the right call. We can walk you through both options and run actual numbers so you know what you are looking at before you commit to anything.

States We Help With Second Home HELOCs

We are licensed in Arizona, California, Colorado, Florida, Idaho, Ohio, South Carolina, and New Mexico. Note that Texas has specific restrictions on second home HELOCs and those are generally not available in that state. If your second home is in one of the states we service we can help you get started.help.

Ready to Find Out What You Qualify For?

Getting a HELOC on a second home is something a lot of homeowners do not even know is an option. If you have equity sitting in a vacation property and you want to put it to work, we can help. At Bonelli Financial Group we work with multiple lenders so we can find the right fit for your credit profile, your property, and your goals.

Call us at 800-BONELLI or click here to get your rate quote.

Compare your options: Home Equity Loan (HELOAN) vs HELOC

Frequently Asked Questions

Can I get a HELOC on a vacation home?

Yes. As long as the property qualifies as a true second home, you meet the credit and equity requirements, and the property is in a state we service, you can get a HELOC on a vacation home. Requirements are stricter than on a primary residence but it is absolutely doable.

What credit score do I need for a second home HELOC?

Most lenders we work with require a minimum of 680 for a second home. A higher score in the 740 range gets you better terms, higher loan amounts, and more lender options.

Can I get a HELOC on a second home in Texas?

Generally no. Texas has very specific home equity laws and second home HELOCs are not available in that state under most programs. Texas primary residence equity options are available, just under different rules. Give us a call and we can walk you through what is possible based on your specific situation.

What is the difference between a second home and an investment property for HELOC purposes?

A second home is a property you personally use for part of the year. An investment property is primarily used to generate rental income. Lenders treat these differently and the qualifying guidelines are not the same. If you are not sure which category your property falls into, we can help you figure that out before you apply.

How fast can I get funded on a second home HELOC?

Most borrowers can be funded within 5 business days after notary is completed. Unlike primary residences there is no rescission period on second home HELOCs so the process moves faster.

Does my second home need to be in the same state as my primary residence? No. As long as the second home is in a state we are licensed in we can help you regardless of where your primary residence is located.