If you’ve built equity in your home over the past few years, you’re not alone. Home values have climbed significantly, and a lot of homeowners are equity-rich without even realizing it.

Life does have a way of creating moments where that extra cash would help though. Such as paying off high-interest credit card debt, tackling a home repair, covering tuition, or finally starting that renovation that’s been on hold.

Because of this very real reality, people everywhere have been cashing out their homes’ recent value spike with a Cash-Out Refinance or a HELOC.

BUT — There are some drawbacks to these traditional options. 

  • For years, a Cash-Out Refinance was the go-to option — and in certain situations, it still is. But with a cash-out refinance, it does also refinance your entire loan. And so, if your current loan had a super low rate from years past, that low rate would go away.

  • A HELOC does allow you to leave your existing mortgage untouched. But the hurdle with a HELOC is — most come with variable rates that can increase over time. Making monthly payments affordable at first, but sometimes more difficult to swallow as the loan ages. And also, a HELOC loan can often come with payment installments versus one lump sum.


And this is why we’re so excited to introduce the Fixed 2nd Mortgage Cash-Out

With this new option, you can cash out a lump sum of your home’s equity — but without it affecting your current loan or your current low rate. You only finance the new amount you’re actually pulling out.

A Real-World Example

Say you’re carrying $30,000 in credit card debt at a typical 24% interest rate, paying $750 a month toward it. Your current mortgage payment is $2,000 a month — so between the two, you’re putting $2,750 a month toward debt every single month.

Here’s the part most people don’t realize: at $750 a month, that $30,000 balance takes about 7 years to pay off. And by the time it’s gone, you’ll have paid roughly $63,000 total — more than $30,000 in interest alone and more than double what you originally borrowed.

But with a Fixed 2nd Mortgage Cash-Out, we can think a lot bigger than just paying off the credit card — without the debt costing you what it used to.

  • You cash out $100,000 in home equity through a new, fixed-rate 2nd mortgage *(20-year fixed at 8.5%). Your original mortgage — and its rate — stays exactly as it is: $2,000 a month.
    • (We’re conservative estimating this rate by the way. It could be lower or a bit higher as well, depending on current market norms. Just know it’s a safe estimation for the example. And also that our direct lender advantage allows us to get you the most competitive option possible).
  • $30,000 of that pays off the credit card debt in full, immediately. That 24% interest stops working against you today, not seven years from now.

  • The remaining $70,000 is yours for whatever’s next — a renovation, tuition, an emergency fund, or just sitting in savings for real peace of mind. Most people don’t need $70,000 all at once; that’s the point. It’s there if life asks for it.

  • On the standard 20-year term, the full $100,000 comes to about $870 a month. Added to your existing $2,000 mortgage, your new total is $2,870 — only about $120 more than the $2,750 you’re already paying.

For roughly $120 a month more than you’re paying right now, the credit card debt is gone and $70,000 is sitting in your account. A clean slate and a six-figure cushion.

But what about the 20 years?

The right question. The 2nd mortgage is a 20-year fixed loan, but you don’t have to take 20 years to pay off the portion that replaced your credit card debt.

If you paid that same $30,000 over the same 7 years you would’ve spent fighting the credit card — at the 2nd mortgage’s fixed 8.5% instead of the card’s 24% — you’d pay about $10,000 in interest instead of $33,000. Same debt, same timeline, roughly $23,000 saved, just by changing what kind of debt it is.

And because the loan is fixed, the choice is yours: pay the $870/month and keep your budget breathing room, or pay down the debt portion faster and capture the interest savings too. Either way, the extra $70,000 is already yours — working for you instead of sitting in someone else’s credit card statement.


Worth a Conversation?

If you’re someone who could benefit from cashing out some of your home’s equity — but don’t want to give up your current mortgage rate, we’re of course happy to have a conversation, to see if it would be beneficial to you. And as always with our team — there will be no pressure. We’ve been a happy partner of Christian radio stations across the country for many many years, and those quality relationships continue because we don’t pressure. We’re legitimately invested in those stations — and their listeners.

Disclaimer: This article is for informational purposes only and is not a commitment to lend. Rates, terms, and eligibility vary by borrower. The example above is hypothetical and simplified for illustration. Please contact a United Faith Mortgage loan officer for details specific to your situation.