Lightning Equity Hybrid HELOC Q&A
What is the Lightning Equity Hybrid HELOC?
The Lightning Equity Hybrid HELOC is a home equity line of credit (HELOC) that offers a fixed interest rate on initial funds drawn at closing, while allowing future draws at new fixed rates based on the market index at the time of the draw. It provides flexibility, faster access to funds, and full principal and interest payments throughout the draw and repayment periods.
How does this HELOC differ from a traditional HELOC?
Unlike a traditional HELOC, which typically has a variable rate for the full term, the Lightning Equity Hybrid HELOC locks in a fixed rate for each draw. The initial loan amount is drawn at closing with a fixed interest rate. If additional draws are taken, each draw receives a new fixed rate.
Key differences:
- Fixed Rate on Each Draw – Unlike traditional HELOCs with variable rates.
- Full Principal & Interest Payments – No interest-only periods.
- Automated Processing – Faster approvals and funding.
What are the benefits of the Lightning Equity Hybrid HELOC?
- Fixed Interest Rate for Each Draw – Avoids market fluctuations.
- Fast Access to Funds – Automated approval process speeds up funding.
- Flexible Loan Terms – Available in 5, 10, 15, and 30-year terms.
- No Prepayment Penalty – Borrowers can repay early without fees.
- Revolving Credit – Borrowers can repay and draw again during the draw period.
Eligibility & Requirements
Who is eligible for the Lightning Equity Hybrid HELOC?
Eligible borrowers typically include:
- Homeowners with available equity in a primary residence, second home, or investment property.
- Borrowers with a minimum credit score of 640-740, depending on loan terms.
- Those who meet debt-to-income (DTI) ratio requirements (maximum 50%).
What credit score is required for this HELOC?
Credit score requirements vary based on loan amount and combined loan-to-value (CLTV) ratio:
- Minimum 640 for up to 75% CLTV
- Minimum 660 for up to 80% CLTV
- Minimum 680 for up to 85% CLTV
Higher credit scores allow for higher borrowing limits and better terms.
How much home equity do I need to qualify?
- The maximum CLTV allowed varies based on loan terms and borrower qualifications, typically up to 85% CLTV.
- Homes listed for sale are limited to 80% CLTV.
- Properties in Texas have a max CLTV of 80% and must be owner-occupied.
- Investment properties and second homes are capped at 70% CLTV.
Loan Structure & Interest Rates
How does the hybrid feature work?
- At closing, the full loan amount must be drawn at a fixed interest rate.
- If the borrower takes additional draws later, each draw receives a new fixed rate based on the market index at that time.
- Borrowers can repay and redraw funds during the draw period.
This allows predictable payments while maintaining access to additional funds.
What are the available loan terms?
The Lightning Equity Hybrid HELOC offers four term options, each with a different draw period:
| Loan Term | Draw Period |
|---|---|
| 5 Years | 2 Years |
| 10 Years | 3 Years |
| 15 Years | 4 Years |
| 30 Years | 5 Years |
What fees are associated with the Lightning Equity Hybrid HELOC?
- No prepayment penalties or early termination fees.
- A $300 subordination fee applies in some states for refinancing.
- Origination fee determined by the automated system (charged at closing).
- Appraisal fees may apply depending on the loan amount and property type.
Loan Process & Repayment
How do I apply for the Lightning Equity Hybrid HELOC?
- Pre-Qualify – Automated system determines eligibility.
- Application & Verification – Borrowers submit income, credit, and property information.
- Loan Approval & Closing – Fixed interest rate is set at closing.
- Access Funds – The full approved loan amount is drawn at closing.
- Future Draws Available – Borrowers can request additional draws based on available credit.
The Lightning Equity team handles all disclosures, verifications, loan documents, and funding coordination.
How long does it take to get approved?
Approval can take just a few days, with funding occurring as quickly as 10-14 days depending on verification requirements.
What are the repayment terms?
- Full principal and interest payments begin immediately after funding.
- Borrowers can repay and withdraw funds again during the draw period.
- Payments are fully amortized with no interest-only period.
Usage & Flexibility
What can I use the Lightning Equity Hybrid HELOC for?
Borrowers can use funds for:
- Home renovations and improvements
- Debt consolidation (paying off high-interest credit cards or loans)
- College tuition or education expenses
- Medical bills or unexpected expenses
- Investment opportunities
Can I pay off my HELOC early?
Yes! There are no prepayment penalties, meaning borrowers can pay off their HELOC early without extra fees.
Can I use this HELOC on a second home or investment property?
Yes, but different CLTV limits apply:
- Primary Residence: Up to 85% CLTV
- Second Home: Up to 70% CLTV
- Investment Property: Up to 70% CLTV
HELOC Myths & Misconceptions
Is this HELOC interest-only?
No. Unlike traditional HELOCs, the Lightning Equity Hybrid HELOC requires full principal and interest payments from the start.
Does using a HELOC affect my first mortgage?
No. This HELOC is a standalone product and does not replace or modify your existing mortgage. However, it may impact your ability to refinance in the future if your combined loan-to-value (CLTV) ratio exceeds lender limits.
Is a full home appraisal required?
Not always. The Lightning Equity Automated System determines property value using an Automated Valuation Model (AVM). In some cases, a Broker Price Opinion (BPO) may be required.
Why Choose the Lightning Equity Hybrid HELOC?
✔ Access Cash Quickly – Faster funding than traditional HELOCs
✔ Fixed Interest Rate on Each Draw – Avoids unpredictable rate hikes
✔ No Prepayment Penalty – Pay off your balance anytime
✔ Use for Any Purpose – Home improvements, debt consolidation, tuition, or investments
✔ Flexible Loan Terms – Choose from 5, 10, 15, or 30 years
💡 Pro Tip: Unlike traditional HELOCs, this product requires full principal and interest payments—no interest-only periods, meaning you pay down your balance faster.
See If You Qualify → Check Eligibility
Lightning Equity Hybrid HELOC vs. Traditional Home Equity Loans
Traditional Home Equity Loan
❌ One-time lump sum payout
❌ Fixed rate but no ability to redraw funds
❌ Higher monthly payments
Lightning Equity Hybrid HELOC
✅ Draw funds as needed during the draw period
✅ Lock in a fixed rate for each draw
✅ Flexible repayment with the ability to borrow again
💡 Pro Tip: The Lightning Equity Hybrid HELOC gives you control over your borrowing—draw funds when you need them, at a predictable fixed rate.
See What You Qualify For → Start Here
HELOC Loan Features & Requirements
📌 Minimum Loan Amount: $25,000 ($35,000 in Texas)
📌 Maximum Loan Amount: $400,000
📌 Property Types: Primary residences, second homes, and investment properties
📌 Max CLTV: Up to 85% for owner-occupied homes, 70% for second homes & investments
📌 Eligible Borrowers: U.S. citizens & permanent residents
💡 Pro Tip: Borrowers in Texas must be owner-occupants, and homes listed for sale are capped at 80% CLTV.
Find Out How Much Equity You Can Access → Get Approved