Hightechlending Introduces Credit Card–style Second-lien Loan To Tap Home Equity

National mortgage lender HighTechLending has launched a second-lien version of a home equity product designed to function more like a credit card, the company announced Tuesday.

The product, called EquitySelect, debuted in September as a first-lien home equity loan that allows borrowers to set monthly payments as low as 1% of their annualized loan balance, subject to a cap.

Any unpaid interest is added to the loan balance and ultimately repaid when the home is sold or through a final balloon payment that will not exceed the property’s value.

The newly launched second-lien version allows homeowners to tap home equity without disturbing their existing first mortgage — a key consideration for borrowers who locked in ultra-low rates in recent years. 

Both the first- and second-lien versions are now available through HighTechLending’s wholesale platform, which includes brokers, nondelegated lenders, banks and credit unions, the company said. 

CEO and President David Peskin told HousingWire that the second-lien product is aimed at equity-rich borrowers whose cash flow does not fit traditional underwriting models and who want payment flexibility without refinancing their first lien.

“Today, a large number of borrowers are getting declined,” Peskin said, adding that as many as 40% of borrowers between 40 and 60 years old — and 60% over 60 — are denied a second lien by a financial institution. “These include those that are self-employed, or on commission, where their cash flow may fluctuate, or on a fixed income.”

Peskin said HighTechLending redesigned the traditional home equity loan by qualifying borrowers based on cash-flow-driven payment flexibility rather than fixed amortization schedules.

Under EquitySelect, borrowers can make payments below the full interest amount, capped at a level aligned with their financial comfort, enabling access to higher loan amounts than they might receive from a traditional lender.

EquitySelect is currently available in 10 states — including Arizona, California, Colorado, Florida, Idaho, New Jersey, Nevada, Ohio, Oregon and Utah — with additional states being added monthly. The product requires a minimum FICO score of 650.

Loan-to-value ratios are tailored to the borrower’s needs and the expected length of time they will live in the home. Interest rates are generally in line with conventional home equity loans but slightly higher, reflecting the payment flexibility built into the product, Peskin said. 

The product is only available for primary residences, although borrowers may use proceeds to purchase a second home. The company is also evaluating an expansion to residential investment properties.

HighTechLending aims to reach $100 million in monthly originations within 18 months. Peskin said the lender is already in discussions with banks and credit unions interested in offering the product to customers who are frequently declined under traditional guidelines.

“We’ve been speaking to some banks and credit unions about offering this to their customers as well, given that their guidelines are very strict at the 50% debt-to-income level, and they’re turning down customers all the time,” Peskin said.