Hello,
I currently have two mortgages -- the main one is a 15 year fixed (2.5%) and the second mortgage is an employee relocation assistance loan (0%). The 2nd mortgage is about $200K and the whole amount is due next year (balloon payment).
I'm looking into getting a HELOC from Third Federal (seems to be popular here) to pay off the 2nd mortgage next year. My understanding is that since HELOC is a line of credit, opening one doesn't include paying off an existing lender (unlike mortgage refinancing). If so, does it mean the lender will only consider the equity that I currently have in my house with both mortgages? (as opposed to equity I will have once I pay off the 2nd mortgage using HELOC)?
Also, Third Federal says HELOC is only available as a first or second lien, but I currently have two liens on my house. Does that mean I can't even get their HELOC? (even though I plan on paying off the 2nd mortgage w/HELOC)
Thank you.