Maine Home Equity Loans: A Lump Sum Second Mortgage on Your Home

A home equity loan is a second mortgage. You borrow one lump sum at closing, and it sits behind your first mortgage as a second lien. There's nothing to draw later. You get the whole amount up front and pay it back over time.

• Loan size: up to $1,000,000.
• Homes: primary homes and second homes in Maine.
• Credit: a 660 minimum credit score on the program I use for this loan.
• Debt to income: up to 50%.
• Ownership: second homes need at least 6 months of ownership before a cash-out. If you bought your home recently, ask me about timing.

The limit is set by combined loan-to-value. That's your first mortgage plus the new loan, compared with the home's value.

• Primary home: combined loan-to-value up to 90%.
• Second home: combined loan-to-value up to 85%.

Your credit and the loan size can bring that limit down. I'll tell you where your file lands before anything is ordered.

I don't post a rate here, because it changes and it depends on you. These are the things that move it:

• Credit: stronger credit usually prices better.
• Combined loan-to-value: the more equity you leave in the home, the better the pricing usually is.
• Loan size: the amount you borrow affects pricing.
• Occupancy: a primary home usually prices better than a second home.
• Doc type: full doc usually prices better than bank statements or a P&L.

Full doc is the standard way to qualify. You document income with W-2s, pay stubs or tax returns. Most W-2 earners and retirees with steady income fit here.

Bank statements or a P&L is built for self-employed owners. Instead of the income on your tax returns, you qualify with 12 months of personal or business bank statements or a 1-year P&L. Your income is still documented, just from your business records.

A lot of Maine owners work for themselves. Contractors, fishermen, guides, shop owners and seasonal businesses often show a lower income on their tax returns than they really earn, because of write-offs. That can sink a full doc loan.

The bank statement or P&L option fixes that:

• Qualify with bank statements or a 1-year P&L instead of the income on your tax returns
• Loans up to $1,000,000
• Non-warrantable condos and rural homes can qualify, with lower limits on some homes

If you're self-employed and buying or refinancing a first mortgage instead, my Maine self-employed loans page covers that.

This loan is for the home you live in or your second home in Maine. A second home is one you use yourself part of the year. Single family homes, townhomes, 2 to 4 unit homes and condos can qualify, including non-warrantable condos and rural homes, with lower limits on some property types. If the property is a rental, that's a different product, and my DSCR HELOC page covers it.

I also arrange HELOCs on Maine primary and second homes. The difference is how you get the money.

• A home equity loan is one lump sum at closing. It fits when you know the number, like a new roof, a kitchen or paying off higher cost debt.
• A HELOC is a line you draw from. It fits when costs come in stages, like a renovation done in phases.

A lump sum or a line of credit? With the lump sum, the whole amount is yours at closing and there's nothing left to draw. With a line of credit, most of the money comes out at closing and the rest is there to draw later. My Maine HELOC page covers how the line works.

Both sit behind your first mortgage, so neither one touches the loan you already have. I'll run both against your plan before you choose. If your home is in Florida, my Florida HELOC page covers the line there.

Text me at (207) 615-7770, or send the Maine address, your current first mortgage balance and a rough idea of your credit through the contact form. I'll tell you plainly how much the home supports and whether a home equity loan or a HELOC fits better.