I’m Michael DiVita — DRE #01372066 | NMLS #241655, DiVita Home Finance (DRE #01818285 | NMLS #323700), Tiburon, CA. I’ve been in California mortgage lending since 2000 and founded DiVita Home Finance in 2007. I’m known as a creative mortgage broker: when a bank says no, I find the lender and the loan structure that can say yes. Call (800) 239-1103.
A HELOC (home equity line of credit) lets California homeowners borrow against their equity as a revolving line: you draw what you need during a draw period, pay interest only on what you use, and keep your existing first mortgage untouched. A home equity loan (HELOAN) is the fixed-rate, lump-sum version.
For homeowners who locked in a low rate in 2020–2022, a HELOC or home equity loan is usually the cheapest way to get cash out of the house — you pay today’s rate only on the new money. As a broker, I can shop banks, credit unions and specialty lenders, including programs for self-employed borrowers, higher loan-to-value lines and larger loan amounts that many banks don’t offer.
How a HELOC Works
- Draw period — commonly 10 years. Borrow, repay and borrow again. Many programs allow interest-only payments during this time.
- Repayment period — commonly 10–20 years. You can no longer draw, and payments include principal.
- Variable rate — usually the Prime Rate plus a margin, so your payment changes when Prime moves. Some lenders let you lock part of the balance at a fixed rate.
- Second lien — the line sits behind your first mortgage; your first mortgage’s rate, balance and terms don’t change.
Plan for the end of the draw period: if you’ve been paying interest only, the payment will rise when principal repayment starts.
HELOC vs. Home Equity Loan (HELOAN)
| Feature | HELOC | Home equity loan (HELOAN) |
|---|---|---|
| Rate | Variable (usually Prime + margin) | Fixed for the life of the loan |
| How you get the money | Draw as needed | Lump sum at closing |
| Payments | Vary with balance and rate; often interest-only during draw | Same principal-and-interest payment every month |
| Best for | Phased projects, ongoing or uncertain costs, a standby reserve | A single large expense where you want payment certainty |
Choose a HELOAN when you know exactly how much you need and want a fixed payment. Choose a HELOC when you want flexibility and to pay interest only on what you use.
How Much Can You Borrow?
Maximum line = (home value × maximum combined loan-to-value) − first mortgage balance.
| Example: $800,000 home, $400,000 first mortgage | Maximum line |
|---|---|
| 80% CLTV (common bank limit) | $240,000 |
| 90% CLTV | $320,000 |
| 95% CLTV (select programs) | $360,000 |
Many banks stop at 80–85% CLTV. Select programs I have access to go up to 95% CLTV for well-qualified primary-residence borrowers — see HELOC to 95% CLTV. Lenders also cap the line or loan amount, and those caps vary widely; some fixed-rate home equity loans go up to $1 million for high-value homes and strong borrowers. Your income, credit and debt-to-income ratio still have to support the payment.
Home Equity Programs I Can Arrange
Standard Second-Lien HELOC
A revolving line behind your existing mortgage for renovations, tuition, a rental down payment or a cash reserve.
Fixed-Rate Home Equity Loan, Including Larger Loan Amounts
A lump sum at a fixed rate. For high-value homes in Marin, San Francisco, the Peninsula or Los Angeles, some programs go well above typical bank limits.
Bank Statement HELOC or Home Equity Loan
For self-employed borrowers whose tax returns understate income: qualify on 12–24 months of bank deposits. See the bank statement HELOC guide.
First-Lien HELOC
If your home is paid off — or you want to replace your first mortgage with a line of credit — a first-lien HELOC gives you revolving access as your only mortgage.
Buy Before You Sell
Tapping equity in your current home can fund the down payment on your next one so you can make a non-contingent offer. HELOCs are hard to open on a home that’s listed for sale, so timing matters — see bridge loans for other options.
Renovation and ADU Funding
A HELOC is a common way to fund an ADU or remodel in stages. Some renovation programs lend against the after-improvement value — see ADU financing and renovation loans.
Investment Property HELOC
Available from fewer lenders, with lower CLTV limits and higher pricing than primary residences. For rentals, a DSCR cash-out refinance is sometimes the better tool.
HELOC vs. Cash-Out Refinance
A cash-out refinance replaces your entire first mortgage at today’s rate. If your current rate is well below market, that usually costs more than adding a HELOC or home equity loan. Illustrative example (comparison rates only, not a quote): a $450,000 loan at 2.75% from 2021 now has about $398,000 left. To get $150,000:
| Cash-out refinance at 6.5%, 30 years | Keep first + $150,000 home equity loan at 8%, 20 years | |
|---|---|---|
| New loan(s) | ~$548,000 | $398,000 (unchanged) + $150,000 |
| Monthly principal and interest | ~$3,465 | ~$1,837 + ~$1,255 = ~$3,092 |
| First-year interest | ~$35,600 | ~$22,950 |
A cash-out refinance can make more sense when your current rate is already near market, you want one fixed payment, or you’re consolidating a large amount of debt. Full comparison: HELOC vs. cash-out refinance.
Typical Qualification Factors
- Credit: minimums vary by lender and CLTV — higher scores unlock higher CLTV and better pricing.
- Equity: enough that your first mortgage plus the new line fits under the program’s CLTV limit.
- Income and DTI: full documentation, or bank statements on some programs.
- Property: primary residences get the best terms; second homes and rentals have tighter limits.
- Valuation: automated valuations on some smaller lines; appraisals for larger ones.
Rates move with the Prime Rate and lender pricing, so I quote current terms for your situation rather than posting numbers that go stale.
Is HELOC Interest Tax-Deductible?
Under current federal rules, interest on a HELOC or home equity loan is generally deductible only if you use the money to buy, build or substantially improve the home that secures the loan (IRS Publication 936). California did not adopt that restriction: on your state return you can still deduct interest on up to $100,000 of home equity debt ($50,000 if married filing separately), regardless of how you use it. Talk to your tax advisor about your situation.
Frequently Asked Questions
How much can I borrow with a HELOC in California?
Multiply your home’s value by the lender’s maximum CLTV and subtract what you owe. Many banks allow 80–85%; select specialty programs go to 90–95% for well-qualified borrowers. Income, credit and the program’s maximum line size also limit the amount.
What is the difference between a HELOC and a home equity loan?
A HELOC is a revolving line with a variable rate — draw what you need and pay interest only on the balance. A home equity loan is a lump sum with a fixed rate and a fixed monthly payment.
Does a HELOC affect my existing low-rate mortgage?
No. A HELOC or home equity loan is a separate second lien. Your first mortgage’s rate, balance and terms stay the same.
Can self-employed borrowers get a HELOC?
Yes. Besides standard full-documentation programs, some lenders offer bank statement HELOCs and home equity loans that qualify income from 12–24 months of deposits instead of tax returns.
Can I get a HELOC on an investment property?
Some lenders offer investment property HELOCs, usually with lower CLTV limits and higher rates than primary homes. A DSCR cash-out refinance is sometimes a better option for rentals.
Is HELOC interest tax-deductible in California?
Federally, generally only when the funds buy, build or substantially improve the home securing the loan. California still allows interest on up to $100,000 of home equity debt regardless of use. Confirm with your tax advisor.
How long does it take to get a HELOC?
It depends on the lender, valuation method and how quickly documents come in. Lines that qualify for an automated valuation can close faster than those needing a full appraisal. I’ll give you a realistic timeline once I see your file.
Related Resources
- HELOC vs. Cash-Out Refinance
- HELOC to 95% CLTV
- Bank Statement HELOC for the Self-Employed
- Cash-Out Refinance in California
- Reverse Mortgage vs. HELOC
- Bridge Loans in California
- ADU Financing in California
- California Land Loan Guide
Official Sources & References
Talk to Michael Directly
DiVita Home Finance | Tiburon, CA | In lending since 2000, founded DiVita Home Finance in 2007. Michael DiVita DRE #01372066 | NMLS #241655. Company DRE #01818285 | NMLS #323700.
💬 Text: (310) 849-9124
