Top Ways to Use a 1st Lien HELOC

Updated as of March 26, 2024 |

Good to know

1st Lien HELOCs are growing in popularity for new and existing home buyers. Many are replacing their mortgage for a more flexible solution that fits their lifestyle needs. As you explore the ways that a 1st Lien HELOC can be used, be sure to remember that it’s good to remain cashflow positive and use the Maximized Cashflow Strategy in conjunction with your 1st Lien HELOC. This maximizes your cost savings, while also providing extra leverage for life’s opportunities or new home renovations.

Using the Maximized Cashflow Strategy, you can quickly pay down your home using your net income. Because you have rapid access to capital at any time, you might re-distribute your net earnings to pay down your principal balance on your home. This method shortens the term of your loan, and ultimately, the total amount of interest you pay on your home.

Consolidating your loans is a good way to juggle multiple loans at once. Your First Lien HELOC is a source of revenue that you can regularly draw from to manage this consolidated debt. You can also lower your interest rates through consolidation.

First Lien HELOCs tend to have lower interest rates than other loans like credit cards, second mortgages and any unsecured debt. When you consolidate these other loans with your Fist Lien HELOC, you can reduce your overall interest expense as well.

There are two types of debt, secured debt and unsecured debt. Unsecured debt is considerably more expensive because they typically come with higher interest rates. Your First Lien HELOC is considered secured debt since there is a mortgage on your home. Credit card or student loan debts are considered unsecured because they are based on credit history. You can turn your unsecured debt into secured debt by consolidating your loans.

If you have a positive credit history, consolidating your loans makes great financial sense and can save you a lot of money in interest. This is also a good move for those who have high-interest rates on other loans or have trouble making payments.

Upgrading your home

Using your First Line HELOC to pay for home improvements is another smart move. When you improve the features of your property, you increase its value. A First Lien HELOC offers a flexible credit source to fund high-ticket projects like a new kitchen or bathroom remodel or a back yard pool and oasis.

These projects can drive up the value of your home and increase equity. Depending on the type of project, you can often receive a good return on your investment.

Invest in Real Estate

If you have enough equity built up in your home, you can use a 1st Lien HELOC to access that capital and purchase additional real estate or property. Because 1st Lien HELOCs can be underwritten up to 1.5 million without additional paperwork, many real estate investors find the 1st Lien HELOC the ultimate financing tool for accessing capital, buying more homes, paying them down quickly, and then repeating the cycle.

Navigate Retirement

If you’ve built up your nest egg and are transitioning from accumulation to distribution, you likely have your assets tied up in illiquid forms. Of course, you have the money and can use it if you need it. But you would trigger taxable events, and also likely pay fees on top of that. By leveraging a 1st Lien HELOC, you can access liquid capital quickly, and for a low interest rate, without worrying about paperwork and financial logistics. From home improvements to helping the grandkids, a 1st Lien HELOC is an amazingly simple way to manage expenses and preserve your assets.

Achieve Financial Freedom

Sign up on to get connected with a licensed lender who can deliver an all-in-one 1st Lien HELOC. They’ll walk you through the application process and help outline your budget, your numbers, and exactly how much you can save by replacing your mortgage.