Home Equity Second Loans in Colorado
A home equity loan or line of credit may be the exact type of financing you need if you want to take some cash out and your first mortgage has an interest rate below 5%.
Term Explanation
The acronym "LTV" means the loan amount ÷ by the appraised value.
Example: 90 LTV means you can get a loan up to 90% of the property value if you qualify.
If your home is worth $1,000,000 and you have a $500,000 first loan at 4.00% you may qualify for a 2nd loan up to $400,000.
The first and new second combined loans would total $900,000. $900,000 ÷ $1,000,000 = 90 LTV.
Home Equity Loan - (maximum LTV's)
Minimum Credit Scores
Primary Home
Second Home
Rental Property
(1-2 units)
(1-2 units)
740 and above
95 LTV
90 LTV
85 LTV
700 - 739
95 LTV
90 LTV
85 LTV
680 - 699
90 LTV
90 LTV
85 LTV
640 - 679
85 LTV
80 LTV
80 LTV
620 - 639
70 LTV
60 LTV
60 LTV
Product Terms
• Refinance Second liens or Purchase second loans combined with a first loan • Fixed rate terms: 5, 10 ,15, 20, 25 & 30 years repayment periods
Loan Amounts
Minimum: $100,000 • Maximum: $500,000. The loan amount available is determined by the equity in your property.
Occupancy
• Owner-Occupied
• Second / Vacation Homes
• Investment Rental Properties
• Borrowers are allowed to have a maximum of 10 Financed Properties
Debt to Income
• Maximum 50% DTI with minimum FICO credit scores of 700 and $3,500 of Monthly Residual Income
• Monthly Residual Income = Total Monthly Income – Total Monthly Mortgage and other debts on credit report
• Max 45% DTI for all other situations
Eligible Properties
• Single Family homes (including Modular homes and PUD’s)
• Condominiums (Warrantable) • 2-Units (Duplex or Two-family home)
Ineligible Properties
• Condotels (Non-Warrantable Condo) • Cooperatives • New Construction Condominium Projects
• Mobile Homes • Manufactured Housing • Commercial • Geodesic Domes • Working farms and ranches
• Unimproved Land • Properties with more than 20 Acres • Timeshares • Leasehold • 3-4 Units • Properties listed for sale in the past 12 months
Prepayment Penalty
None. This feature is great benefit for investment properties which normally have a penalty of 6 monhs interest.
Home Equity Line of Credit - (max. LTV's)
Minimum Credit Scores
Primary Home
Second Home
Rental Property
(1-2 units)
(1-2 units)
740 and above
90 LTV
80 LTV
N/A
700 - 739
90 LTV
80 LTV
N/A
680 - 699
90 LTV
N/A
N/A
640 - 679
N/A
N/A
N/A
Product Terms
• 30-year variable term (Index plus a margin)
• 10-year interest only draw period with a 20-year fully amortizing repayment period
Line Draws
• Minimum initial: $50,000 • Additional draws: Prohibited during the first 90 days after the closing date
• Minimum $1,000 not to exceed credit limit.
Maximum line of credit
• Maximum: $500,000. The maximum amount available is also determined by the equity in your property.
Occupancy
• Owner-Occupied
• Second / Vacation Homes
• Borrowers are allowed to have a maximum of 10 Financed Properties
Debt to Income
• Maximum 45% DTI
• 30 year, fully amortized payment based on start rate + 2% and the total credit limit used to qualify.
Eligible Properties
• Single Family homes (including Modular homes and PUD’s)
• Condominiums (Warrantable) • Townhomes
Ineligible Properties
• Condotels (Non-Warrantable Condo) • Cooperatives • New Construction Condominium Projects
• Mobile Homes • Manufactured Housing • Commercial • Geodesic Domes • Working farms and ranches
• Unimproved Land • Properties with more than 20 Acres • Timeshares • Leasehold • 2-4 Units • Properties listed for sale in the past 12 months
Prepayment Penalty
None. This applies to single family homes (detached or attached), condos and townhomes.
** NEW LOAN PRODUCT ** Fixed rate home equity loans using bank statements for self employed borrowers and anyone paid a 1099.
