A Second Lien Position HELOC Save A Little Money Over A First Lien Due to Interest Rates – Why Not Start Here

A Second Lien Position HELOC Save A Little Money Over A First Lien Due to Interest Rates – Why Not Start Here

First, the bank’s balance sheets see second-lien position loans as high risk and are exponentially more likely to issue a freeze or pay in full call on the loan. They have no guarantee of collateral rights (the home) and therefore they cannot repossess a property, so a bank must remove this loan from their books before all others!

Second, the access to equity on a first lien HELOC allows up to 95% loan to value on the home’s equity. That money is 100% liquid like a checking account and as we say, “It’s better to have it and not need it than to need it and not have it!” In other words, it’s a cushion or safety net in case one needs cash immediately for an emergency.

Third, one has a more efficiency due to there being zero segregation of income – these small transactions or money that sits outside the HELOC operating account go to waste.

So, even if the numbers are identical or it even saves some money to get a second position HELOC – is it worth throwing away 2/3 of the free benefits listed above?

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