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I am a current homeowner with a property that has no mortgage (everything has been paid off). A family member is in need of some cash to consolidate some credit card debt and I would like to help them out. However, the amount of money that they need is in the upwards of 100k.

Using my home's equity to open a secured loan, what I've found so far are two main types of secured loans: HELOC and home equity loan.

With a HELOC, I feel like this is more of a credit card that uses my home as collateral. I rather have one lump-sum payment now and pay back a loan at a fixed rate. So my issue with this is that since the rates are variable in relation to the prime rate (which I believe will rise in the upcoming years), I don't want uncertainty when repaying the HELOC.

With a home equity loan, most banks that I've checked (Citi bank, Chase bank, 5/3 bank, many others) only allow a home equity loan to be opened as a 2nd lien mortgage and I must have a current mortgage. Since I don't have a 1st lien mortgage, I do not qualify (according to the banks that I checked).

My question is, besides these two products, do I have any other option/product to request a one-time, lump-sum loan that I can pay back (at a fixed rate, preferably) over the next 10/15 years? And are there any banks that allow home equity loans as a 1st lien mortgage? If not, am I only stuck with a HELOC?

I tried searching online for others who had the same problem but most forums (and banks) are trying to push HELOC above everything else. As mentioned above, I rather not pay variable rate loans. The closest forum that I found that describes my issue is here: https://www.nerdwallet.com/community/t/take-out-loan-against-paid-off-house/8000
However, the community suggested opening a HELOC.

Let me know if you have any thoughts, I appreciate any help. Thanks.

Disclaimer - I trust this family member to help pay me back. I understand the risks of what will happen if I fail to make payments on any loan that uses my home as collateral.

Yes, the product you want is a fixed rate loan. As rates were dropping in the late '90s, I went from a "Mortgage" to a "Home Equity Loan." The latter had a fixed rate, 15 year term, and a crediting structure for payments that ran by the day. i.e. unlike a mortgage whose amortization is unchanged if you make every payment 10 days early vs 5 days late, this product lent itself to prepayments, or early full payments. That aside, it had no closing costs, but a higher rate. So refinancing from a 6% fixed mortgage to a 5.5% HEL actually made sense. As did another refi to 5% a few years later.

TL:DR - The product is called a Home Equity Loan, and you should shop around to find one that suits you.

Mandatory disclaimer - You should not do this. Not unless you have the assets to take this on yourself, and say goodbye to the $100K. Years ago, I 'lent' my sister in law $10,000, and I told my wife that I never expected to see it again. Which I haven't. The $10K paid off a card she defaulted on, and set her up for a refinanced mortgage. She stuck to my one condition, that she take $400/mo from the reduced payments, and deposit to her matched 401(k). There's over $50K in that account from this deal. I offer this long anecdote in case the family member will be a burden to you in the future and somehow this will still benefit you by lessening that future issue.

Firstly, congrats on a mortgage-free home!

I wanted to echo that what you want is the "Home Equity Loan" aka fixed rate loan.

I noticed you mentioned a lot of bigger/national financial institutions (Chase, Citi, 5/3), have you looked into your local community bank or credit union? Local institutions have the potential to be more flexible and creative in their financing if they keep their loans on the books.

I did a search for "home equity loan 1st lien position" and came across two credit unions on the first page of search results that specifically offer this product (Beth Page FCU and Atlantic FCU). I presume that there would be more that you might qualify for based on where you live, work, go to school, worship or are related to. I have no investments in either FI, but it sounds like first lien position home equity loans are still a thing.

Another option that you might consider: get the HELOC, borrow/lend the money, then re-fi into a 15-year mortgage. This is the long way around and incurs additional costs but might open up more options for you since you're not looking for a first position home equity loan, you're just doing a 1st position mortgage.

Allen