HAMPTON HELOC RATES TODAY
Current HELOC rates in
Hampton, PA.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Current HELOC rates in
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Compare HELOC rates in Hampton.
Key Points
• Home equity line of credit interest rates are influenced by the prime rate and your credit score.
• You can borrow up to 90% of your home equity with a HELOC.
• HELOCs come with a draw period and a repayment period.
• Interest rates can change, which means payment amounts can change as well.
• HELOCs generally have lower interest rates than personal loans.
Introduction to HELOC Rates
Welcome to our guide to home equity line of credit (HELOC) interest rates in Hampton, Virginia. We’re here to help you, as a homeowner, understand the ins and outs of what influences these rates and how to land the best deal. We’ll walk you through current market trends, the perks and potential pitfalls of HELOCs, and how to sift through various lenders. By the time you’re done, you’ll be well-prepared to decide if a HELOC is the right financial move for you.
What Is a HELOC?
A HELOC is a revolving credit line that’s secured by your home equity (the value of your home less the amount you still owe on your home loan). This means that if you miss payments on a HELOC, a lender could foreclose on your home. To qualify for a HELOC, you typically need at least 15% equity in your home. You can borrow up to 90% of your equity. HELOCs typically come with a draw period and a repayment period, and the details of these are worth noting:
The Draw Period
During the HELOC’s draw period (usually 10 years), you can access funds as needed, using the credit line much as you would a credit card. You’ll have to pay interest on what you borrow, but most lenders won’t require you to repay the principal, though you can do so if you wish to draw on the full credit line again. A HELOC interest-only calculator can compute monthly interest.
The Repayment Period
After the draw period ends, the repayment period of 10 to 20 years begins. Monthly payments will increase as you begin to repay the principal plus interest. HELOC interest rates are usually variable, which means the amount you pay each month may go up or down as rates change. A HELOC monthly payment calculator is useful at this stage in your borrowing experience.
Recommended: Different Types of Home Equity Lending
The Origin of HELOC Interest Rates
HELOC interest rates are pegged to the prime rate, which is the rate that banks charge their most creditworthy customers. The prime rate is in turn influenced by the Federal Reserve’s monetary policy. Lenders add a margin to the prime rate to determine the interest rate they will charge you. The margin varies from one lender to another, and is often based on your credit score, debt-to-income (DTI) ratio, and the amount of equity you have in your home. These variables mean that it’s important to shop around and compare rates and terms from different lenders before deciding on a lending partner for your HELOC.
How Interest Rates Impact HELOC Affordability
As you’re thinking about how to get equity out of your home, you’ll want to seek out the lowest available interest rate from a lender whose terms will work for your needs. Even a slight increase in rates can have a meaningful impact on your monthly costs and total interest. For instance, on a $50,000 HELOC with a 20-year repayment term, a one-percentage-point rate increase from 7.00% to 8.00% can bump your monthly payment up by $30 and increase the total interest paid over the repayment phase by almost $7,000.
HELOC Interest Rate Trends
Keeping an eye on the prime interest rate can be quite enlightening, as HELOC rates in Hampton tend to follow it closely. But having a sense of the history of the prime rate can also help put the current rates you’re seeing into perspective. It is unusual for the rate to reach a low of 3.25%, as it did in 2020. The high point in recent years was 8.50% in 2023. Some borrowers try to wait for a rate drop before applying for a HELOC, but if you need to borrow and can’t wait, focus on making your application attractive to a prospective lender. We’ll share some how-tos below.
| Date | U.S. Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.5% |
| 9/27/2018 | 5.25% |
Source: U.S. Federal Reserve
Variable vs Fixed Interest Rates
Whatever initial interest rate you obtain on a HELOC likely won’t last for the duration, because HELOCs typically come with variable (also called adjustable) interest rates. The HELOC agreement will spell out how often the rate can adjust, how extensive the change can be, and what the overall rate cap on the HELOC is. If you can get comfortable with prospective costs within the range, then you can probably handle a HELOC. If any unpredictability in your rate makes you nervous, consider a HELOC alternative from the list below.
Helpful Tools & Calculators
Before you apply for a HELOC, you can use an online calculator to compute what your monthly payments would be, both in the draw (interest-only) and repayment phases. These are some calculators that are useful to home equity borrowers.
Run the numbers on your HELOC.
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Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
How to Qualify for a Competitive HELOC Rate
There are a few things you can do to secure a competitive HELOC rate. Start by making sure you have at least 15% equity in your home (and ideally more). Subtract what you owe on your mortgage from your home’s estimated value. Then divide the result by the home value to get your equity percentage. Next, tackle your credit score and debt-to-income ratio by following the tips below:
Improve Your Credit Score
A credit score of 700 or higher will help you qualify for the best available HELOC rates in Hampton. Making timely payments and chipping away at credit card balances can work wonders. It’s also wise to give your credit report a once-over, catching any inaccuracies and rectifying them pronto. Avoid closing old credit accounts or opening new ones in the months leading up to your application.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is a simple equation: your total monthly debt payments, divided by your gross monthly income. Most HELOC lenders prefer a DTI under 50%, but for the best rates, you’ll want to go below 36%. You can do this by paying down debts, increasing your income, or both.
Application Process for a HELOC in Hampton
Many lenders offer the convenience of prequalification for a HELOC online, making it possible to see the rate and credit limit you could be working with. Typically, it’s a matter of entering some basic financial information. If you want to move on with a full application, follow these steps:
Step 1: Run the Numbers
Your first step, if you haven’t already done so, is to check your equity level (as noted above, you’ll need 15% equity). Also make sure your credit score is at least 640 and your DTI ratio is 50% or lower. If you pass muster on all three, move to the next step.
Step 2: Compare Lenders
As you explore lenders’ offers, look at interest rates but don’t stop there. Compare qualification requirements, credit line maximums, fees, and the length of the draw and repayment periods a lender offers, among other factors. Look for lenders with competitive HELOC rates in Hampton and the right mix of terms for your needs.
Step 3: Submit Your Application
Have your identification, income verification, and property details ready to go. Recent pay stubs, W-2 forms, and tax returns are usually needed. If you’re self-employed, a lender might ask for a profit-and-loss statement and a couple of years of tax returns. Submitting your application is pretty simple — you can do it online, over the phone, or in person. Just make sure everything’s accurate to avoid any hiccups.
Step 4: Get an Appraisal
An appraisal is a thorough and professional evaluation of your home’s value. It’s a key factor in determining the maximum amount you can borrow and the terms of the loan.
Step 5: Prepare for Closing
Before you can access your HELOC funds, you’ll need to sign documents and pay any fees. Some lenders make the funds available to you within three days after the closing of the HELOC. Be sure to review all the documents to make sure there are no errors and that you understand the terms and conditions of the agreement.
Recommended: HELOC vs. Home Equity Loan
Closing Costs and Fees
The good news is, HELOC closing costs are generally more wallet-friendly than those associated with purchasing a home or opting for a cash-out refinance. The priciest item on the list is usually the appraisal fee, which can range from $300 to $600. A title search might set you back $100 to $450. There are also application, origination, and administrative fees to consider, along with annual maintenance fees that can climb to $250.
Tax Benefits and Considerations
Homeowners may be eligible to deduct HELOC interest if the funds borrowed are used for significantly improving a primary residence. A tax advisor can help you navigate the tax implications for your individual circumstances. You’ll have to itemize to capture this benefit, which is good for your 2025 return. Your tax advisor will help you track how HELOC interest can be handled in 2026 and beyond.
Alternatives to HELOCs
There are other ways to tap into your home equity, as well as borrowing options that don’t involve putting your home on the line at all. Consider these if you’re at all iffy about a HELOC:
Home Equity Loan
A home equity loan provides a lump-sum loan at a fixed interest rate, and you’ll begin making principal-plus-interest payments at once. You can typically borrow up to 85% of your equity. Lenders look for a credit score of 680 or more, with many favoring 700 and above. This option is great if you have a specific need for a defined amount of money and prefer the predictability of fixed payments.
Recommended: Home Equity Loan Calculator
Cash-Out Refinance
A cash-out mortgage refinance lets you refinance for more than you currently owe and take the difference in cash. It’s a good option, so long as the interest costs of a new mortgage are better than what you’d have at your current rate. Things to think about with a cash-out refinance vs. a home equity line of credit: With a refi you’d need a credit score of 620 or higher and a debt-to-income ratio under 43%. You can choose between fixed or variable interest rates.
Personal Loan
A personal loan is a versatile, typically unsecured loan that you repay in regular, fixed installments over a period of two to seven years. The key benefit here is that your home is not at risk of foreclosure should you encounter financial challenges. Most lenders look for a credit score of 610 or higher. While these loans are relatively quick to secure, the interest rates may be higher compared to HELOCs or home equity loans.
The Takeaway
When you’re considering a HELOC in Hampton, it’s important to understand the full picture of costs. If you feel you can handle the uncertainty of variable interest rates and you can foresee your borrowing needs extending for a number of years, a HELOC could be the right choice. Before you apply, make sure you’ve got a steady income, a solid credit score, and enough equity in your home. And don’t forget to shop around for the best rates and terms.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
Unlock your home’s value with a home equity line of credit from SoFi, brokered through Spring EQ.
FAQ
What can a HELOC be used for?
A HELOC is a versatile financial tool that can be used for a variety of expenses, from home improvements to debt consolidation. It provides a flexible line of credit, allowing you to withdraw funds as needed during the draw period, typically 10 years, and make interest-only payments. This makes it useful for managing ongoing expenses or big projects that have unpredictable costs.
What’s the monthly payment on a $50,000 HELOC?
Your monthly payment on a $50,000 HELOC will vary according to the rates and terms of your agreement. During the draw period, you might only need to pay interest, which can be quite manageable. For instance, at a 7.00% interest rate, your monthly interest-only payment would be approximately $292. But keep in mind, once the repayment period kicks in, you’ll be paying both principal and interest, so your monthly expense will increase.
Is a HELOC a good idea at this time?
A HELOC could be a good idea for you if you need to borrow money but aren’t sure exactly how much you’ll need or when you will need it. If you are good at managing your bills and can handle the variable interest rate of a HELOC, this can be one of the more cost-efficient ways to borrow a large sum.
How tough is it to get a HELOC?
A HELOC is not hard to obtain if you meet the lender’s baseline criteria. They typically look for a minimum credit score of 640, a debt-to-income ratio under 50%, and at least 15% equity in your home. The application process involves a few steps, such as checking your credit score, comparing lenders, submitting documents, getting a home appraisal, and preparing for the closing.
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
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SOHL-Q225-409
More HELOC resources.
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What is a Home Equity Line of Credit
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Different Types of Home Equity Loans
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HELOC vs Home Equity Loan: How They Compare