Keep your rate. Use your equity.

A home equity loan is a second mortgage that sits behind the one you already have. You borrow a lump sum at a fixed rate, repay it on a level schedule over a set term, and your first mortgage is untouched — same rate, same balance, same payment. It is the option people mean when they say they want cash out without giving up a low rate.

A cash-out refinance replaces your existing mortgage with one larger loan, so your entire balance moves to today's pricing. A home equity loan leaves the first mortgage alone and adds a second, smaller one. If you locked a rate well below today's market, refinancing the whole balance to reach your equity usually costs more in interest than the second lien does — even though the second lien carries a higher rate, it applies to a much smaller amount.

A home equity loan is a single lump sum at a fixed rate with predictable payments. A HELOC is a revolving line you draw against as needed, usually at a variable rate, so the payment moves with the market. A fixed loan suits a known one-time cost; a line suits staged or uncertain spending.

Lenders look at combined loan-to-value — your first mortgage plus the new second, measured against appraised value. The combined figure is what sets your ceiling, so the more equity you have and the less you owe, the larger the second lien can be. Your credit profile and the property type move it as well. We will run your address and your actual numbers rather than a rule of thumb.

No — DC fully exempts security instruments on residential property of five units or fewer, and the statute draws no line between a first and a second deed of trust (D.C. Code § 42-1102(21)). A second lien qualifies on the same terms as a refinance, with the same condition: a notarized ROD Form 21 affidavit affixed at recording, which your settlement agent files. That is a real District advantage — in Maryland a second lien is new money and is taxed accordingly.

Yes. Borrowing against your home is not a sale and triggers no reassessment, so the DC homestead deduction and your property-tax status carry on unchanged.

Interest on a home equity loan is generally deductible when the proceeds are used to buy, build or substantially improve the home securing the loan, subject to the overall mortgage-interest limits. Used for other purposes — consolidating debt, tuition — it generally is not. This is a tax question rather than a lending one, so confirm your own situation with your CPA.

Second liens generally move faster than a full refinance because there is less to re-underwrite, though the timeline still depends on the appraisal and on how quickly documentation comes back. We will give you a realistic date once we have seen your file, not a marketing number.

District Mortgage is a licensed mortgage broker, not a bank or direct lender. We do not fund loans with our own money. We take your application and shop it across our wholesale lender network, so the lenders compete for your loan and you take the winning offer. NMLS #2819502 — verify us at nmlsconsumeraccess.org.

No. We are licensed in the District of Columbia only, so the property has to be in DC. We cannot accept an application or a pre-qualification request for a property in Maryland, Virginia, or any other state. If your property is elsewhere, nmlsconsumeraccess.org will show you licensed originators in that state.

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