Frequently Asked Questions

• Do I need a tax return to qualify for a HELOC?

  While it is possible to get a HELOC or a home equity loan without showing your tax return or income verification, it is usually more expensive. Low- or no-documentation loans are risky, an♔d finding a HELOC or home equity loan lender to approve your loan with🍰out documentation may be tricky and put you at risk of becoming a victim of a lending scam.

  Learn More: Is Interest on a Home🌺 Equity Line of C♔redit (HELOC) Tax Deductible?
• How do I calculate how much home equity I have?

  To figure out how much equity you have in your home, calculate the difference between your home’s current market value and the sum of outstanding debts—mainly, your primary mortgage. In other words, if your home is worth $250,000 and you owe $150,000 on your mortgage, subtract that remaining loan balance from the home's value: Your home equity is $100,000.
  

  Learn More: How Do I Calculate How Much Home Equity I Have?
• What do you need to get a HELOC or a h𒁃ome equityജ loan?

  Homeowners who would like either a HELOC or a home equity loan generally 🦩need the following: More than 20% home equity; a credit score of at least 600; and a stable income history for at least two years. It’s possible to get approved by 𝓀going through lenders that specialize in high-risk borrowers, but expect to pay much higher interest rates. 

  Learn More: Home Equity Loan vs. HELO🎃C: What’s the Difference?
• Can I use a HELOC for a down payment?

  You’re taking a risk using a HELOC on your primary residence in order to make a down payment on a second property. Make sure you have the monthly cash flow to pay mortgages on both properties in addition to your HELOC. If you do have the funds, a HELOC might be a good way to get cash 🅠for a d🍒own payment. 

  Learn More: 5 Ways Not to Use a Home Equity Lin🅷e of♓ Credit (HELOC)
• How𒐪 much money can you get from a home equity loan?

  You can genꦅerally borrow as much as 85% of your home equity. ♍However, you’ll still have to come up with several thousand dollars to meet closing costs, so you won’t walk away from the deal with that full 85%.

  Learn More: Can I Use a Home Equi♏ty Loan to Buy Another House?
• How do interest rates work on a HELOC?

  HELOCs generally havᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚe variable interest rates, just like credit cards, but the rates tend to be lower because the collateral provides a cushion to the lender should the borrower default. A HELOC with a fixed rate will often have a variable interest rate during the initial draw period before conver💟ting to a fixed interest rate for the repayment period. 

  Learn More: Is Taking Out a HELOC Right for You?