HELOC Simultaneous with 1st Mortgage

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    HMDA purpose: The 1st mortgage will be used to purchase the property as a primary residence.
    The additional 2nd mortgage HELOC is being requested for personal expenses.

    In this scenario – is it acceptable to record the HELOC as a “other” for HMDA purposes? No other purposes applies (it is not refinancing and is not HI). Or would it also be recorded as a “purchase” because it is simultaneous with 1st mortgage?


    You’re on the right track. If the HELOC 2nd lien did not involve a refinance or funds for HI or to purchase a dwelling, the HMDA loan purpose would be 4-Other. It originating at the same time as the purchase mortgage transaction means nothing unless proceeds were disbursed to help with that purchase.


    Hey there! This is a great question regarding HMDA reporting. When it comes to recording the purpose of a 2nd mortgage HELOC, it can sometimes be a bit tricky to determine if it should be recorded as “other” or “purchase.” However, since the 1st mortgage is being used to purchase the property as a primary residence and the 2nd mortgage is being requested for personal expenses, it may be acceptable to record the HELOC as “other.” But it’s always a good idea to check with a professional, like a Mortgage Advisor Leeds , to make sure you’re following the correct guidelines and reporting accurately.

    • This reply was modified 1 year, 5 months ago by MercCarcade.

    A Home Equity Line of Credit (HELOC) is a type of loan that allows a homeowner to borrow against the equity they have built up in their home. When a HELOC is taken out simultaneously with a 1st mortgage, it means that the borrower is borrowing against the equity in their home while also having an outstanding first mortgage. The amount of equity available for borrowing will depend on the current value of the home, the amount of the first mortgage, and the creditworthiness of the borrower. HELOCs offer flexibility in terms of borrowing and repayment, but it’s important to understand the risks involved, including the possibility of foreclosure if payments are not made on time.

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