Can you get multiple HELOCs at the same time?

Borrowing your home equity through a home equity line of credit (HELOC) is a common financial move that can provide significant funding — $100,000 or $200,000 HELOCs are well within the range of the $313,000 in average equity homeowners have right now. But what about taking out multiple HELOCs, either simultaneously on the same property or different properties? And what if you already have a HELOC from your primary residence and want to open another one? 

These scenarios aren't as common as taking out a single HELOC, generally speaking, but are certainly a possibility solely based on how much equity homeowners have right now. Yet before homeowners even consider opening two HELOCs at one time, they would need to take a serious look at their finances to gauge whether they could take on the risk — and commitment —of multiple home equity products. 

But let's say you have the financial means to cover the cost of opening two HELOCs at the same time or adding a HELOC to one you already have — would your bank allow it? We spoke with mortgage experts to find out if taking out more than one HELOC at a time is a realistic option.

See what your HELOC interest rate could be here.

Can you get multiple HELOCs at the same time?

Generally speaking, it's easier to open multiple HELOCs at the same time on two separate properties than on the same property. 

Applying for multiple HELOCs on different properties

Whether you're applying for two HELOCs at the same time or already have a HELOC on one property you own and want to open a HELOC on another property of yours, the chances are good that you can get multiple HELOCs, provided you qualify, says Steve Hill, a mortgage broker with SBC Lending. 

"You can certainly get one HELOC on each of your properties," Hill says. 

Not only do you avoid the complexities of opening two HELOCs on one property, but you also spread out the impact on your properties' loan-to-value (LTV) ratio. 

"It might make sense to split $500,000 into two $250,000 HELOCs on two different properties to keep the LTV low," Hill says. "Splitting up HELOCs to show more equity in each property might save you on the interest rate. If you're getting over 80% LTV on one property, it's worth looking into using other properties as well."

To get the lowest HELOC rates, Hill recommends keeping your LTV ratio on all your properties below 60%.

If you're planning to open more than one HELOC on separate properties, Hill recommends finishing one HELOC application before starting another. Otherwise, the process can be tricky. 

"Doing multiple [HELOCs] at once is complicated because all the lenders need to know the details and terms of each other's [HELOCs]," Hill says. "It's about twice as complex. I would advise closing one, then working on the next one once you have all the final paperwork in hand."

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Applying for multiple HELOCs on the same property

Trying to get a second HELOC on the same property is much more difficult than getting multiple HELOCs on separate properties. The risk the bank takes on is too great, in most cases, Hill says. 

If you default on your mortgage and have to enter foreclosure, your primary mortgage lender will get paid first. If there's any money left after that, the lender that provided your first HELOC gets paid. And, if there are any remaining funds, they'll go to your second HELOC lender. 

The chances of there being any funds left over for your second HELOC lender are low, which is why lenders typically avoid being in the third position, Hill says. 

"Generally, you can't have two HELOCs on one property," he says. "One of those lenders would need to take [third] position, which is riskier than [second] position, which is already a risky position for a lender to be in."

To add to the risk, HELOCs offer low profit margins to lenders, and second-position lenders were "wiped out" during the mortgage crisis in the late 2000s, Hill notes. 

"They remember that experience," Hill says. "They don't want to make that mistake again."

Is it smart to get multiple HELOCs at the same time?

Because of the risk involved in being a third-position lender, whether or not it's smart to do two HELOCs on the same property is a relatively moot point since most banks won't do it. However, certain lenders may be willing to offer a second HELOC — but they'll charge hefty interest rates to do so, Hill says. "There are some hard money lenders that will take [third] position, but they'll have very high rates and high fees to compensate for that risk," Hill says. 

Consequently, even if you could get a second HELOC on the same property, it's not a good idea based on the type of lender you'd have to work with and the interest rates and fees you'd likely pay.

However, taking out multiple HELOCs at the same time on different properties can be a smart decision depending on your circumstances, says Matthew Teifke, principal at residential property management firm TR3 Capital. 

"In most cases, I don't see the average homeowner carrying multiple HELOCs," Teifke says. "It's more common with investors or business owners who are trying to leverage equity across multiple properties for growth. But for the average homeowner, the scenarios are usually more niche."

Scenarios that might make sense include having multiple properties, using the second HELOC to consolidate high-interest debt, or using the HELOC funds to pay for major life expenses such as college tuition, medical emergencies or starting a small business.

"If they're not investing the second HELOC or using it for something with a real return or life-changing need, I don't recommend it," Teifke says. "It's too easy to overextend. Without cash flow or [return-on-investment] backing it up, it's just stacking risk on top of risk."

The bottom line

Generally speaking, you can get two HELOCs at the same time but only if you qualify and you're taking the HELOCs out on different properties. While it's possible to apply for both HELOCs at the same time, doing the lines of credit consecutively instead of simultaneously is recommended since it simplifies the process.

That being said, taking out two HELOCs on the same property — whether simultaneously or one after the other — likely won't work since many lenders aren't willing to take on the risk of being last in line for a payout if you default on your mortgage payments and your home goes into foreclosure.