Home equity
HELOCs, home equity loans and reverse mortgages, state by state
Most homeowners who call me about equity have the same two facts on the table: a first mortgage at a rate they are not getting back, and a home worth a lot more than they owe. Refinancing to pull cash out would trade that rate away.
A second mortgage lets you borrow against your equity and leave the first mortgage alone: a HELOC if you want a line to draw on, a home equity loan if you want one fixed lump sum. If you are 62 or older and want no monthly mortgage payment, a reverse mortgage is the fourth option. The loans are the same in every state. What changes at the state line is the tax when the mortgage is recorded, who has to sign it, and which lenders will make it, and all of that is in the table below.
Four ways to use your equity
| HELOC | Home equity loan | Cash-out refinance | Reverse mortgage (HECM) | |
|---|---|---|---|---|
| What you get | A line of credit you draw on as you need it | One lump sum at closing | A new, larger first mortgage; you keep the difference | Cash from your equity with no monthly mortgage payment |
| Your first mortgage | Stays exactly as it is | Stays exactly as it is | Paid off and replaced at today’s rate | Paid off; the HECM takes first place on the home |
| Rate | Variable, tied to the Prime Rate | Fixed for the life of the loan | Fixed or adjustable | Fixed, or adjustable with caps HUD sets |
| Payments | Interest-only while you draw, then principal and interest | Principal and interest from the first month | Principal and interest on the whole new balance | None required; taxes, insurance and upkeep still yours |
| Who it fits | Spending over time: a renovation, tuition, a cushion | A known amount you want paid off on a schedule | When today’s rate beats the one you have | Homeowners 62 and older who plan to stay |
How much you can borrow comes down to the combined loan-to-value: your first mortgage plus the new loan, divided by what the home is worth. Among the second-mortgage lenders I work with, a HELOC goes as high as 95% of the home's value with a credit score of 720 or above on a one-unit primary home, with lines from $25,000 to $750,000. A fixed-rate home equity loan goes to 90% with a score of 680 for up to $400,000, or 720 for up to $500,000, on terms of 10, 15, 20 or 30 years. A second home or an investment property gets a lower cap.
A reverse mortgage works the other way round. HUD's Home Equity Conversion Mortgage, the HECM, is for homeowners who are all 62 or older, on the home that is your principal residence. Every HECM includes a session with a HUD-approved counselor, and the lender can collect no fees until you have the counseling certificate. No monthly mortgage payment is required, and you still pay the property taxes, the homeowners insurance and any HOA dues, and keep up the home. How much is available depends on your age, the interest rate and the home's value, up to HUD's limit of $1,249,125 for 2026.
What changes in each state where I lend
A HELOC and a home equity loan each record a mortgage against your home, so the state rules that reach a first mortgage reach them too. 3 of the 15 states tax the recording (Alabama, Georgia, Minnesota), and each measures a line of credit its own way. Homestead states want a spouse's signature even when the spouse is not on the loan. The last column counts the second-mortgage lenders I work with that will lend in the state, from their own guidelines and rate sheets as of October 14, 2026.
| State | Tax when the mortgage is recorded | Does a spouse who is not on the loan sign? | Second-mortgage lenders I work with here |
|---|---|---|---|
| Alabama | YesRecordation tax is $0.15 per $100. On a line of credit the lender chooses: pay on the maximum principal stated in the mortgage, or pay on what is drawn at the start and then on new advances as they are made.Alabama Department of Revenue, recordation tax; Ala. Code § 40-22-2(2), as reprinted in 2026 SB244 | Yes, on a homesteadAlabama Code § 6-10-3 | 3 of 3 |
| Alaska | Recording fees onlyAlaska charges the same page-based recording fees for all documents rather than imposing a tax on mortgage debt.Alaska DNR Recorder’s Office fee schedule | Directed to join; limited effect if notAlaska Statutes Title 34, AS 34.15.010 | 2 of 3One lender's eligible-state list leaves Alaska off. |
| Arkansas | Recording fees onlyArkansas charges uniform recorder fees for mortgages and deeds of trust. Its separate real-property transfer tax is imposed on instruments that convey sold real estate, not on the mortgage securing the debt.Arkansas DFA, Real Property Transfer Tax; Arkansas Code § 21-6-306 | Not yet researched | 3 of 3 |
| California | Recording fees onlyCalifornia does not impose a state tax measured by mortgage debt when a mortgage or deed of trust is recorded. Documentary transfer tax applies to conveyances; separately, state law authorizes flat recording fees on real-estate instruments.California Revenue and Taxation Code § 11911; Government Code § 27388.1 | Yes, on community propertyCalifornia Family Code § 1102 | 3 of 3 |
| Georgia | YesIntangible recording tax is $1.50 per $500, capped at $25,000. A line of credit that runs longer than 62 months is taxed on the full line, drawn or not, when it is recorded; later draws inside that limit owe nothing more. A line from a credit union lender is exempt.Ga. Comp. R. & Regs. 560-11-8 (Rules .02, .13, .14); Georgia DOR Informational Bulletin 2025-02 (HB 586, 62-month threshold) | No spouse rule found; owners signOfficial Code of Georgia, §§ 19-3-9 and 44-14-60 | 3 of 3 |
| Illinois | Recording fees onlyIllinois imposes real-estate transfer tax when title is transferred. Mortgages instead incur statutory recording fees and a flat program surcharge, not a tax measured by the secured debt.Illinois Counties Code recording fees; Illinois Legislative Research Unit Tax Handbook | Yes, on a homestead735 ILCS 5/12-901 through 12-904 | 3 of 3 |
| Kansas | Recording fees onlyKansas repealed its mortgage registration tax statutes. Mortgages now incur the register of deeds’ ordinary page-based recording fees rather than a tax measured by secured debt.Kansas Statutes chapters 79, article 31 and 28-115 | Not yet researched | 3 of 3 |
| Louisiana | Recording fees onlyLouisiana applies statutory document-recording charges to instruments filed in the parish mortgage records rather than a statewide tax measured by mortgage debt.Louisiana Revised Statutes § 13:844, fees of ex officio recorders | Not yet researched | 3 of 3 |
| Maine | Recording fees onlyMaine imposes real-estate transfer tax on deeds and controlling-interest transfers, not on mortgage debt. Mortgages are recorded under the general flat instrument fee.Maine Revised Statutes titles 33 § 751 and 36 § 4641-A | No, by statute33 M.R.S. § 480 | 3 of 3 |
| Minnesota | YesMortgage registry tax is 0.23% (0.24% in Hennepin and Ramsey counties), paid by the homeowner. A line of credit is taxed once on the maximum line, whatever is later drawn or repaid; raising the line is taxed on the increase. A reverse mortgage is taxed on its expected total disbursements, and a HECM excludes the FHA premiums and servicing fees from that figure.Minn. Stat. § 287.035 (rate); Minn. Stat. § 287.05, subds. 2, 3 and 6 (lines of credit, reverse mortgages); Minnesota Department of Revenue, mortgage registry tax rate | Not yet researched | 3 of 3 |
| Missouri | Recording fees onlyMissouri charges a uniform recorder user fee as a prerequisite to recording any instrument rather than imposing a tax measured by mortgage debt.Missouri Revised Statutes § 59.319 | Yes, on a homesteadRSMo § 513.475 | 2 of 3One lender's eligible-state list leaves Missouri off. |
| South Carolina | Recording fees onlySouth Carolina’s value-based deed recording fee applies to the privilege of recording a deed that transfers real estate, not to recording mortgage debt.South Carolina Department of Revenue, Deed Recording Fee | No spouse rule found; owners signS.C. Code § 21-5-10, abolition of dower and curtesy | 3 of 3 |
| South Dakota | Recording fees onlySouth Dakota’s real-estate transfer fee applies to transfers of title and expressly exempts security-only transfers. Mortgages instead carry the same fixed recording fee as deeds and other instruments.South Dakota Codified Laws §§ 43-4-21 and 43-4-22; South Dakota Codified Laws § 7-9-15 | Yes, on a homesteadSDCL chapter 43-31 | 2 of 3One lender's eligible-state list leaves South Dakota off. |
| Wisconsin | Recording fees onlyWisconsin’s real-estate transfer fee applies to conveyances of ownership interests, while a conveyance solely providing or releasing security for debt is expressly exempt. Mortgages remain subject to ordinary recording fees.Wisconsin Department of Revenue, Real Estate Transfer Fee; Wisconsin Statutes § 59.43 | Yes, on a homesteadWis. Stat. § 706.02, formal requisites of a conveyance | 3 of 3 |
| Wyoming | Recording fees onlyNo Wyoming state tax measured by mortgage debt was identified. State law records deeds, mortgages, and other instruments under the county clerk’s general page-based recording charges; local charges still require transaction-level confirmation.Wyoming Statutes § 18-3-402 | Yes, on a homesteadWyo. Stat. § 34-2-121 | 3 of 3 |
The recording-tax and spouse answers come from the same statute-sourced research as which states tax a mortgage and when a spouse signs. The reverse mortgage has no column because HUD's rules and its limit are the same in all 15 states.
Talk it through with Jeff.
HELOCs, home equity loans and reverse mortgages aren't in the online pricing tool. Call and Jeff will tell you which fits and what it costs.
Common questions
Can I borrow against my home without refinancing my first mortgage?
Yes. A HELOC or a home equity loan is a second mortgage: it sits behind the first one and leaves it exactly as it is, rate and all. Only a cash-out refinance replaces the first mortgage, and a reverse mortgage has to be in first place on the home, so it pays off the first mortgage you have.
How much can I borrow with a HELOC?
Lenders cap the combined loan-to-value, which is your first mortgage plus the new line, divided by the value of the home. Take the cap, multiply it by the value, subtract what you owe, and what is left is the most the line can be. Among the lenders I work with, the highest cap is 95% for a credit score of 720 or above on a one-unit primary home. Your credit score, the occupancy and the number of units all move that cap.
Is a HELOC taxed when it is recorded?
In three of the fifteen states where I lend: Alabama, Georgia and Minnesota. Each one measures it differently on a line of credit. Minnesota taxes the full line once, at 0.23% in most counties. Georgia taxes the full line, drawn or not, when the line runs longer than 62 months. Alabama lets the lender pay on the maximum line or on each advance as it is drawn. The other twelve charge recording fees only.
Does my spouse have to sign a HELOC if they are not on the loan?
It depends on the state, and the reason matters. In Alabama, Illinois, Missouri, South Dakota, Wisconsin and Wyoming, homestead law requires both spouses to sign a mortgage on the home they live in. In California a spouse joins because the home is community property. In Georgia and South Carolina no rule was found that makes a spouse sign who is not an owner, and Maine says by statute that a non-owner spouse need not sign. The table above shows each state, with the ones not yet researched marked that way.
Does the reverse mortgage limit change from state to state?
No. HUD sets one maximum claim amount for the whole country each year; the 2026 figure comes from Mortgagee Letter 2025-22 and is in the paragraph on reverse mortgages above. Unlike the loan limits on a regular FHA loan, it does not change by state or county. The same federal rules apply everywhere: everyone on the loan is 62 or older, and the home is the principal residence.
Why can’t I price a HELOC or a reverse mortgage in the online tool?
The tool prices first mortgages. Second mortgages and reverse mortgages are priced by each lender on its own sheet, and the right one depends on how much you want, how you want to draw it and what your first mortgage looks like. Call me and I will tell you which fits and what it costs.
Educational information, not legal or tax advice, and not a loan approval or commitment to lend. Lender guidelines, rates and state rules change; what applies to a specific loan is confirmed when it is underwritten. Jeff Moran, NMLS #483943, through C2 Financial Corporation, NMLS #135622. Equal Housing Opportunity.