.png)
Closed-End Second Mortgage
Access home equity without replacing your current first mortgage.
What Is a Closed-End Second Mortgage?
A closed-end second mortgage is a second mortgage with a fixed loan amount that is separate from the existing first mortgage.
Unlike a HELOC, it is not a revolving line of credit. The borrower receives a set second mortgage amount, and the existing first mortgage stays in place.
Who This Loan May Be Right For
How Lenders Review the Scenario
Lenders review the current first mortgage balance plus the proposed second mortgage. The combined loan-to-value, or CLTV, matters.
Credit score, occupancy, loan amount, property type, and documentation type all affect eligibility.
Income may be reviewed using full documentation, bank statements, WVOE, P&L-only, 1099 income, or DSCR for investment properties.
Program Highlights
Loan amount range
Loan amounts may range from $200,000 to $5,000,000.
CLTV potential
Maximum CLTV may be available up to 85%, depending on loan amount, property type, occupancy, and credit profile.
Combined lien limits
Combined lien balance limits may range from $2,000,000 to $5,000,000.
Credit profile
Minimum credit score generally ranges from 660 to 720+, depending on the full scenario.
Occupancy options
Available for owner-occupied, second home, and non-owner-occupied scenarios.
Investor review
Non-owner-occupied options may include DSCR review, with DSCR typically needing to meet program requirements.
Documentation Options
- Full Doc
- Bank Statement
- Written Verification of Employment
- P&L Only
- 1099 Income
- DSCR for eligible investment property scenarios
Common Uses
- Debt consolidation
- Home improvements
- Business capital
- Investment property reserves
- Cash-out while preserving first mortgage terms
- Large expense planning
- This is not a commitment to lend.
- Final eligibility depends on credit, income, equity, occupancy, property type, documentation, lender guidelines, and full underwriting review.
- Program availability may vary by state, lender, and borrower scenario.
Closed-End Second Mortgage FAQ
Is a closed-end second mortgage the same as a HELOC?
No. A closed-end second mortgage has a fixed loan amount. A HELOC is generally a revolving line of credit that can be drawn from, repaid, and drawn again during the draw period.
Can I keep my current first mortgage?
Yes, that is the core purpose of the structure. The proposed second mortgage is reviewed separately while the current first mortgage remains in place.
Can self-employed borrowers qualify?
They may. Depending on the lender and full scenario, income may be reviewed with bank statements, P&L-only documentation, 1099 income, or other alternative documentation paths.
Can this be used for an investment property?
It may be available for eligible non-owner-occupied scenarios. Some investment property reviews may use DSCR, property cash flow, reserves, credit, equity, and lender program requirements.
What does CLTV mean?
CLTV means combined loan-to-value. It compares the current first mortgage balance plus the proposed second mortgage to the property value.
What credit score is usually needed?
Minimum credit score often ranges from 660 to 720+ depending on occupancy, loan amount, CLTV, property type, documentation type, and the full borrower profile.