HELOC vs. Refinance: Best Ways to Use Your Home Equity as a 1099 Worker

HELOC vs. Refinance: Best Ways to Use Your Home Equity as a 1099 Worker

If you need flexible acCESs to cash, a HELOC is an excellent alternative to a traditional Refinance. A HELOC works like a credit card secured by your home, allowing you to draw funds from your HELOC only when needed. For 1099 contractors, a HELOC offers a simpler approval process compared to a full cash-out Refinance. The beauty of a HELOC is its flexibility; you only pay interest on the HELOC amount you actually use.

In the HELOC application process, your FICO Score determines your maximum credit limit and HCLTV. A FICO Score above 740 can unlock a much higher HELOC limit. Many homeowners prefer to keep their low-rate first mortgage and add a HELOC instead of doing a complete Refinance. This makes a HELOC a very cost-effective way to access equity for renovations or investments.

Even if you don't have a W-2 and only have 1099 income, a high FICO Score and sufficient home equity make getting a HELOC very straightforward. At AAA Lendings, we offer a HELOC for both primary residences and investment properties. When a new investment opportunity arises, having an open HELOC allows you to move quickly. If your HELOC draw period is ending, you can always look into a Refinance to consolidate the HELOC balance. A HELOC is a "must-have" financial tool for any homeowner. Protect your future by securing a HELOC today.