Does a HELOC have different rules than a cash-out?

Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.

Subordinating a HELOC When You Refinance

Subordinating a HELOC When You Refinance is central to a smooth home equity approval — here are the 2026 rules and numbers.

The rule for 2026

Subordination is when your HELOC lender agrees to stay in second position while you refinance the first mortgage, instead of forcing you to pay off the line. It lets you keep an existing HELOC after refinancing. Lenders charge a small subordination fee and may re-check your credit and equity.

Lenders set their own overlays on top of the basics. Meet the standard below first, then confirm whether your lender layers anything extra.

Documentation you'll typically need

Recent pay stubs and two years of W-2s or returns
Two months of bank statements
Your current mortgage statement and homeowners insurance
A recent appraisal or automated valuation

Equity rules are periodically revised. Join the alerts to be told before changes affect your file.

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Frequently Asked Questions

Subordinating a HELOC When You Refinance — the bottom line for 2026?: Subordination is when your HELOC lender agrees to stay in second position while you refinance the first mortgage, instead of forcing you to pay off the line. It lets you keep an existing HELOC after refinancing. Lenders charge a small subordination fee and may re-check your credit and equity.
Does a HELOC have different rules than a cash-out?: Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.