What’s the difference between a Purchase HELOC vs a HELOC?

Both the purchase HELOC and the regular HELOC are the same. The main difference is “when” you get the HELOC. Keep in mind that we’re comparing a 1st lien purchase HELOC with a 1st lien HELOC in general.

A purchase HELOC is obtained prior to actually buying a home. You’ll have to get pre-approved with the bank that offers a purchase HELOC. Using the pre-approval letter, you can shop for your new home and start making offers. Once you’re ready to close on the home, the bank will provide the documents as part of the closing process and the purchase will be financed through a 1st lien HELOC.

If you already have a home with an existing mortgage, you will not be getting a purchase HELOC. Rather, you’ll be getting a refinance 1st lien HELOC. (Essentially replacing your mortgage)

So the big difference is whether you currently have a home or not.