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• HELOC interest rates are often determined by adding a percentage margin to the U.S. prime rate.
• Pittsburgh homeowners can borrow up to 85% of their home equity with a HELOC.
• During the draw period, you pay only interest on the amount of the credit line you use.
• HELOC interest rates are adjustable, meaning they change with the market, impacting your monthly payments.
• HELOCs offer flexibility and potentially lower interest rates, but they also come with the risk of foreclosure if the borrower defaults.
• Online calculators can help you estimate monthly payments and interest costs.
Introduction to HELOC Rates
Welcome to a comprehensive guide on HELOC interest rates in Pittsburgh, Pennsylvania. This resource is designed to help you, as a homeowner, navigate the waters of home equity financing. We’ll explore current interest rates, the factors that influence them, and the tools that are available to help you estimate your potential monthly payments. Whether you’re dreaming of a home renovation, looking to consolidate debt, or have other significant expenses on the horizon, we’re here to empower you to make informed financial decisions and find the best HELOC for your needs.
A HELOC, or home equity line of credit, is a revolving credit line (similar to a credit card) that is secured by the equity in your home. Your equity can be calculated like this: Take the market value of your home and subtract the amount you still owe on it.
Let’s say your home is valued at $245,000 — the average in Pittsburgh — and your mortgage balance is $175,000: $245,000 – $175,000 = $70,000. Your equity level is 28.5%, well within the qualification zone for a HELOC. You can borrow up to 85% of your equity, if you have at least 15% equity in your home. In this example, you could borrow 85% of $70,000, or $59,500.
A HELOC typically has a draw period and a repayment period.
The Draw Period
The draw period is when you can borrow money in increments, up to your credit limit, repay what you’ve borrowed (or carry a balance), and borrow again. Your lender may furnish you with a dedicated credit card or checks, or you can opt for account transfers. You typically make interest-only payments. Bookmark a HELOC interest-only calculator to determine how much you can afford.
The Repayment Period
The repayment period is when you can no longer borrow and must pay back the principal plus interest. HELOCs have variable interest rates, which rise and fall with the market, so your monthly payment amount varies over the 10 or 20 years of the repayment term. A HELOC monthly payment calculator is handy for predicting what you’ll owe.
How Are HELOC Interest Rates Set?
HELOC interest rates are tied to the U.S. prime rate, which is influenced by the Federal Reserve’s policies. Each lender adds its own margin to the prime rate, which is why HELOC rates vary so much. By having a general understanding of how rates are set, you can better anticipate rate fluctuations and decide the optimal time to apply for a HELOC. You’ll also have a better idea of whether current interest rates are high, low, or somewhere in between.
Your personal credit score, debt-to-income ratio, income, and the amount of equity in your home are also key factors in the rate you receive with different types of home equity loans and HELOCs. We’ll explain how to maximize these factors a little later on.
How Interest Rates Impact HELOC Affordability
Even a small change in interest rate can have a big impact on how much you pay back over the term of the HELOC. For example, a $50,000 HELOC at 8.00% over a 15-year repayment period would have a monthly principal-and-interest payment of $478 and total interest of $36,009. At 9.00%, the monthly payment would go up to $507 — not a dealbreaker for most people. It’s the total interest that’s striking: $41,284, more than $5,200 higher than the lower rate. The longer your repayment term, the more that interest will compound.
Keeping an eye on the prime interest rate is a smart move. Over the years, it’s yo-yoed between 3.25% (in 2020) and 8.50% (in 2023). These ups and downs can help you foresee changes in your HELOC rate. By arming yourself with this knowledge, you’ll be better equipped to make informed decisions about when and how to get equity out of your home.
Historical Prime Interest Rate
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
Adjustable vs Fixed Interest Rates
HELOCs often come with adjustable interest rates, which are influenced by market shifts. At the outset, these rates may be lower than fixed rates, which is an appealing start. Yet the potential for change means your monthly payments will also vary. If the prime rate goes up, your HELOC rates are likely to follow. This might make planning your finances a bit more of a puzzle, but it could also work in your favor if interest rates take a dip.
Weighing the advantages and disadvantages of adjustable versus fixed rates is key to selecting the most fitting home equity financing for your financial landscape.
Useful Tools & Calculators
Before you apply for a HELOC, you can use our online tools to help you estimate your monthly payment and interest costs. You might also consider using a home equity loan calculator to compare different loan options and determine whether a HELOC vs. home equity loan will better serve your needs.
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
As with any home loan, you need to meet certain criteria for a HELOC. Lenders generally require a minimum credit score in the upper 600s, a debt-to-income ratio below 50%, and at least 15% equity in your home. But different metrics are required to secure the best available interest rate. Additionally, understanding your home’s value and the current market conditions can help you negotiate better terms. By preparing thoroughly and comparing multiple lenders, you can find the HELOC that fits your financial goals.
Improve Your Credit Score
Building your credit score to 700 or above will help you secure the best HELOC rates. How can you boost your credit score? Paying your bills on time, every time, and chipping away at credit card balances can make a big difference. Keep your credit utilization low, and dispute any errors on your credit report. A higher credit score not only increases your chances of getting approved, but it also means you’re more likely to get better terms and conditions.
Calculate Your Debt-to-Income (DTI) Ratio
Your DTI ratio is a simple calculation: your total monthly debt payments divided by your gross monthly income. HELOC lenders generally bestow their best rates to borrowers with a DTI below 36%, but the lower your ratio, the stronger your application. To find your DTI, tally up all your monthly financial commitments — mortgage, car loans, student loans, credit card payments — then divide by your pretax monthly income. A lower DTI can bolster your HELOC application.
Compare current HELOC interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
Application Process for a HELOC in Pittsburgh
Many lenders offer the convenience of prequalifying for a HELOC online, which can help you get a sense of the rates available in Pittsburgh and your potential credit limit. Once prequalified, you can move forward with a full application, which entails providing more comprehensive financial and property information.
Step 1: Run the Numbers
First off, check your credit scores and calculate your DTI ratio. Then take a look at your home equity. That’s the difference between what your home is worth and how much you still owe on the mortgage. Making regular mortgage payments is a great way to build equity, but you can also boost it by making home improvements that increase your home’s value. The more equity you have, the better the terms and the more you can borrow with a HELOC.
Step 2: Compare Lenders
When considering HELOC options, be sure to look beyond just the interest rate. Compare qualification requirements, loan minimums and maximums, all associated fees, and the length of both the draw and repayment periods they’re offering. Examining these factors is important. It ensures you’re getting the most favorable terms tailored for your specific financial needs.
Step 3: Submit Your Application
Now get your paperwork in order. You’ll need to gather your identification, income verification, and property information. For income documentation, think recent pay stubs, W-2 forms, and tax returns. If you’re self-employed, a profit-and-loss statement and two years’ tax returns are usually required. Don’t forget to have a homeowners insurance declaration page ready. Once you’re all set, you can submit your HELOC application online, over the phone, or in person.
Step 4: Get an Appraisal
An appraisal is an unbiased, professional evaluation of your home’s worth. The cost generally ranges from $300 to $610. An accurate appraisal is important in determining the maximum amount you can borrow and in meeting the lender’s requirements.
Step 5: Prepare for Closing
Before you can access your HELOC funds, you’ll need to sign all the necessary loan documents and cover any associated fees. Once the official closing of your HELOC is complete, some lenders will have your funds ready within three days. Review the terms and conditions in the loan agreement thoroughly before signing. This way, you can avoid any unexpected surprises and ensure that your HELOC is tailored to your financial needs and expectations.
Closing Costs and Fees
HELOC closing costs are generally more affordable than those associated with home purchases or cash-out refinances. The appraisal fee, which can range from $300 to $610 or more, is often the most significant expense. A title search, if needed, may cost $100 to $450. Additional fees could include application, origination, and administrative costs, as well as annual maintenance fees (up to $250). Some lenders may also charge transaction, inactivity, or early termination fees.
Tax Benefits and Considerations
As a homeowner, you may be eligible to deduct the interest you pay on a HELOC, but only if the loan proceeds are used to substantially improve your primary residence. The current tax law governing this deduction is in effect through 2025. To help you understand the specific and potentially complex tax implications, consult a qualified tax advisor to confirm your eligibility for deductions related to HELOCs.
Alternatives to HELOCs
There are a few alternatives to a HELOC, including a home equity loan, cash-out mortgage refinance, and personal loan. Each option has its own pros and cons.
Home Equity Loan
In contrast to lines of credit, home equity loans deliver a one-time lump sum with a fixed interest rate and a predictable repayment schedule. Typically, you can access up to 85% of your home’s equity with this type of loan. Lenders often look for a credit score of 680 or higher, with many favoring 700 and above. If you need funds right away and prefer a clear-cut repayment plan, a home equity loan could be the right choice for you.
Cash-Out Refinance
A cash-out refinance is a great way to tap into your home’s equity by refinancing your mortgage for more than you currently owe and pocketing the difference. Typically, you need a credit score of 620 or more and a DTI ratio under 43%. You can choose between fixed or variable rates, with the latter potentially granting you more equity access. When weighing a cash-out refinance vs. home equity line of credit, the cash-out option gives you just one monthly payment.
Personal Loan
A personal loan is a versatile, typically unsecured loan that you repay in regular, fixed installments over a period of 2-7 years. The primary advantage of a personal loan is the security it offers your home. Should financial challenges arise, your home is not at risk of foreclosure. Many lenders look for a credit score of 670 or higher. While personal loans are relatively quick to secure, they often come with higher interest rates than HELOCs or home equity loans.
The Takeaway
When considering a HELOC, it’s important to weigh the benefits and risks. HELOCs offer flexibility and potentially lower interest rates, making them suitable for ongoing expenses or variable financial needs. However, they come with the risk of foreclosure if you default. Always compare multiple lenders and understand the terms and conditions before making a decision. For Pittsburgh homeowners, exploring current HELOC rates can help in making an informed choice.
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.
The answer to that question depends on your current financial landscape and the goals you’ve set. HELOCs can be a smart move when interest rates are on the decline, as they often offer more favorable terms than other types of loans. They’re particularly handy for sizable, ongoing expenses like home improvements or consolidating debt. But the variable interest rate can make payments unpredictable, and if you default, you could be facing foreclosure. So before you make a decision, take a good look at your financial stability and weigh the potential risks.
Do you need an appraisal for a HELOC?
Yes, an appraisal is typically required to obtain a HELOC. The appraisal helps determine the current market value of your home, which is important in determining the amount of equity you can borrow against. Lenders use this information to establish your credit limit, which cannot exceed 85% of your home equity. The appraisal is part of the application process and may involve a fee, typically ranging from $300 to $600.
What could prevent you from getting a home equity loan?
There are a few things that might stand in your way, like a less-than-stellar credit score, a high debt-to-income (DTI) ratio, or not enough equity in your home. Most lenders want to see a credit score in the upper 600s, a DTI ratio of 50% or less, and at least 20% equity in your home. If your home’s value has dropped or you still owe a lot on your mortgage, you might not meet the requirements. However, you can still take steps to improve your financial situation and get back on track.
How challenging is it to secure a HELOC?
Acquiring a HELOC can be quite manageable if you meet the lender’s criteria. The key is to have at least 15% equity in your home, a credit score in the upper 600s, and a debt-to-income (DTI) ratio below 50%. The application process involves the verification of income, assets, and property details, often including a home appraisal. While this process can be simpler than that of a home equity loan, it’s crucial to shop around for the best HELOC rates and terms to ensure you secure the most favorable deal.
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• HELOC interest rates are influenced by the prime rate and your credit profile.
• Homeowners can usually access up to 90% of their home’s appraised value.
• A HELOC comes with two distinct payment phases: a draw period and a repayment period.
• Adjustable interest rates mean your monthly payments can change.
• HELOC interest may be deductible if you use the loan for major home improvements.
• To qualify, you’ll need a credit score of 680 or higher, a DTI under 50%, and 15% home equity.
Introduction to HELOC Rates
Welcome to our guide to interest rates for home equity lines of credit (HELOCs) in Austin, Texas. Our goal is to help you understand how to use your home equity to your advantage. We’ll cover the factors that influence HELOC rates, the benefits and risks of a HELOC, and how to compare lenders to find the best deal. Whether you’re planning a home renovation or need funds for other large expenses, this guide will help you make the best financial decision for your needs.
A home equity line of credit (HELOC) is a financial tool that leverages your home equity as collateral. To calculate your equity, you subtract your outstanding mortgage balance from your home’s current value. Typically, lenders require you to have 15% equity in your home to qualify for a HELOC, and you can borrow up to 90% of that equity. HELOCs come with a draw period and a repayment period.
The Draw Period
During this initial period, usually spanning 10 years, borrowers can access funds as needed, make interest-only payments, and re-borrow up to the credit limit if you repay the principal. You may find it helpful to have a HELOC interest-only calculator on hand to estimate payments.
The Repayment Period
Next is the repayment period, lasting 10 to 20 years, which requires you to make monthly principal-plus-interest payments. HELOCs have variable interest rates, so monthly payments change over the course of the term. A HELOC monthly payment calculator will help you anticipate your bills.
Where Do HELOC Interest Rates Come From?
Lenders peg HELOC rates to the prime rate, a figure that indirectly follows Federal Reserve actions. Each lender then adds its own margin to this rate, which is why there is a variety of HELOC interest rates in the marketplace. By keeping an eye on these larger economic factors, you’ll be better equipped to anticipate rate changes and make savvy decisions about when to apply for different types of home equity loans and HELOCs.
Your individual financial profile — including your credit score, debt-to-income ratio, income, and the equity in your home — will also influence the rate you’re offered. We’ll get into those factors later.
How Interest Rates Impact HELOC Affordability
The interest rate on your HELOC can have a big impact on how much you end up paying. Even a small increase in the interest rate can cause you to pay a lot more in interest over the life of the loan. Let’s say you have a $50,000 HELOC with a 15-year repayment period. At an 8.00% interest rate, your monthly payment might be $478. Raise that rate by one-percentage-point, to 9.00%, and your payment bumps up to $507.
While that doesn’t seem like a big difference, the total interest tells another story: The 8.00% rate saves you more than $5,200 over the life of the loan. And the longer your repayment term, the more interest will add up.
HELOC Interest Rate Trends
While there’s no crystal ball for interest rates, keeping an eye on the prime interest rate can offer some clues. Since 2018, the prime rate has seen a wide range, from a low of 3.25% in 2020 to a high of 8.50% in 2023. This historical perspective can help you determine whether current rates are relatively high or low, and even anticipate rate movements.
Historical Prime Interest Rate
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
Adjustable vs Fixed Interest Rates
HELOCs often come with adjustable interest rates, which seesaw up and down with the market. The good news is that these rates usually start lower than fixed rates, making your initial payments more affordable. The downside is that your monthly payments can change, too. Compare that to home equity loans, which usually have a fixed rate and regular monthly payments for the entire loan. When you’re considering how to get equity out of your home, your comfort level with adjustable interest rates can help you make a decision.
Tools & Calculators
Before you apply for a HELOC, it’s a good idea to use our online tools to help you estimate your monthly payments and interest costs. There are a few different HELOC calculators you can use to get a better understanding of your financial situation. And our home equity calculator can help you estimate how much you might be able to borrow.
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
To land a competitive HELOC interest rate, you’ll need to meet a few financial benchmarks. In addition to having at least 15% equity in your home, you’ll need to work on these two tasks:
Improve Your Credit Score
To ensure you’re in the best position to secure a competitive HELOC rate, aim for a credit score of 700 or higher. By making timely bill payments and reducing credit card balances, you can significantly enhance your creditworthiness, making it easier to qualify for a lower HELOC rate. Regularly checking your credit report for errors and disputing them can also help improve your score.
Calculate Your Debt-to-Income (DTI) Ratio
Your DTI ratio is a simple calculation: Divide your total monthly debt payments by your gross (pretax) monthly income. Most HELOC lenders prefer a DTI below 36%, but the lower, the better. A lower DTI ratio signals to lenders that you’re comfortably managing your debt and can handle extra monthly payments.
Current HELOC rates by state.
Compare current HELOC interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
Application Process for a HELOC in Austin
The application process for a HELOC in Austin is a breeze when you prequalify online. This first step is a great way to get a sense of the rates and terms you could be eligible for, without any impact on your credit score. Once you’re prequalified, you can move forward with the full application, which will involve sharing more detailed financial and property information. From there, the lender will assess your credit and home equity to determine your eligibility and borrowing limit.
Step 1. Run the Numbers
Before you dive into the HELOC application process, it’s wise to take a moment to check your credit score and calculate your DTI ratio. Then consider your home equity, which is the difference between what your home is worth and what you still owe on your original home loan. Regular mortgage payments are a surefire way to build equity, and if you’ve made significant improvements to your home, you may have even more equity than you realize. This is a critical step in understanding your financial situation and how much you might be able to borrow.
Step 2. Compare Lenders
Research and compare different lenders to find the best HELOC rates in Austin. Look at interest rates, qualification requirements, loan minimums and maximums, fees, and the length of the draw and repayment periods. Each lender will have unique terms and conditions, so it’s important to read the fine print. Comparing multiple offers can help you secure the most favorable HELOC terms and ensure you’re making an informed financial decision.
Step 3: Submit Your Application
Now, it’s time to get your paperwork in order. You’ll need to gather your identification, income verification, and property information to submit your HELOC application. Income verification often includes recent pay stubs, W-2 forms, and tax returns. If you’re self-employed, lenders may request a profit-and-loss statement and two years of tax returns. Property documentation typically requires a homeowners insurance declaration page. You can submit your application online, by phone, or in person.
Step 4: Get an Appraisal
An appraisal is an unbiased analysis of your home’s worth, conducted by a pro. The typical cost of this step is between $300 and $610. But here’s the thing: It’s very important. Because it’s the key to unlocking the equity in your home. If the appraised value comes in higher than your mortgage balance, you’re one step closer to a HELOC.
Step 5: Prepare for Closing
Before you can access your HELOC funds, you’ll need to sign the loan documents and take care of any associated fees. Some lenders are quick to get the funds to you, making them available within three days of closing. Being prompt with your paperwork and payments will help you get your hands on your HELOC funds without delay.
Closing Costs and Fees
HELOC closing costs are usually less than those for a mortgage or cash-out mortgage refinance. The most significant cost is often the appraisal fee. You may also encounter fees for a title search (ranging from $100 to $450), application, loan origination, and administrative costs. Some lenders may also charge annual maintenance fees (up to $250) and transaction fees.
Tax Benefits and Considerations
Here’s a tip: In 2025, you may be able to deduct HELOC interest if the funds are used to improve your primary residence. Consult a tax advisor to make sure you’re eligible for the deduction. Understanding these tax benefits can help you make the most of your HELOC and potentially reduce your overall financial burden.
Alternatives to HELOCs
There are several alternatives to HELOCs that you might want to consider. Weigh these options carefully to find the best fit for your financial needs.
Home Equity Loan
What is a home equity loan? It’s a one-time lump sum that is paid back at a fixed interest rate. You can borrow up to 85% of the equity in your home, and your credit score needs to be 680 or higher. This loan is ideal for someone who needs a large sum of money upfront and would like to have set payments with a fixed interest rate.
Cash-Out Refinance
With a cash-out refi, you refinance your current mortgage for more than the balance owed and pocket the difference. Typically, you need a credit score of 620 or above and a debt-to-income ratio of 43% or less to qualify. If you’re debating a cash-out refinance vs. a home equity line of credit, know that a refi leaves you with one payment instead of two.
Personal Loan
A personal loan is a versatile, typically unsecured loan that you repay in regular, fixed installments over a period of 2-7 years. The key benefit here is the security of your home—there’s no risk of foreclosure. Many lenders look for a credit score of 670 or higher for personal loans. They are relatively quick to secure, but do note that they come with higher interest rates than HELOCs or home equity loans.
The Takeaway
If you’re considering a HELOC, it’s important to weigh the benefits and risks. HELOCs offer a revolving line of credit with competitive interest rates, making them suitable for large, ongoing expenses. However, they come with the risk of foreclosure if payments are not made. Always assess your financial health, compare lenders, and understand the terms and conditions before applying. For homeowners in Austin, exploring HELOC rates can help you make an informed decision.
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.
A HELOC can be a versatile financial tool, useful for home improvements, personal expenses, or consolidating debt. The beauty of a HELOC is its flexibility: You can borrow what you need, when you need it, and only pay interest on the amount you’ve withdrawn, making it perfect for projects or expenses with fluctuating costs.
What’s the monthly payment on a $50,000 HELOC?
The monthly payment for a $50,000 HELOC is determined by the interest rate and whether you’re in the draw or repayment phase. For instance, with an 8.00% rate during the draw period, your interest-only payment would be approximately $333. Given the same rate during the 20-year repayment period, the monthly principal-and-interest payment rises to $418. Keep in mind, the adjustable interest rate makes predicting monthly payments a moving target.
Do I need an appraisal for a HELOC?
Yes, an appraisal is usually necessary to get a precise read on your home’s current market value and the equity you can tap into. This evaluation assists lenders in determining the maximum amount you can borrow against your home, typically up to 85% of your home’s value, minus the balance of your current mortgage. The appraisal is a crucial step.
How hard is it to qualify for a HELOC?
The process of securing a HELOC is quite manageable, provided you meet the lender’s criteria. Usually, a minimum credit score of 620, a debt-to-income (DTI) ratio below 43%, and at least 15% home equity are required. The steps include evaluating your home’s worth, calculating the available equity, and selecting a lender offering competitive HELOC rates. Although HELOCs are generally more accessible than some other loans, it’s wise to get your finances in order and gather the necessary paperwork to ensure a seamless application process.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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• Home equity line of credit (HELOC) rates in Syracuse are influenced by the borrower’s credit score, home equity level, and income.
• HELOCs have a draw period and a repayment period, and adjustable interest rates that change with the market.
• Online calculators can help you estimate monthly payments and total interest costs.
• You can use a HELOC to fund home improvements, education, or debt consolidation.
• Be sure to weigh the risks, including the possibility of foreclosure, before you apply.
• HELOC interest may be tax deductible if used for significant home improvements; consult a tax advisor to confirm eligibility.
Introduction to HELOC Rates
Welcome to a comprehensive overview of HELOC rates in Syracuse, New York. We’re here to help you understand how these rates are determined and what factors can affect them. You’ll learn about the benefits and risks of HELOCs, how to qualify for a competitive rate, and the tools available to estimate your costs. Whether you’re planning a home renovation or need funds for other expenses, this guide will equip you with the knowledge to make the best financial decision.
A HELOC, or home equity line of credit, is a flexible revolving credit line that taps into your home’s equity (the market value of your home minus what you still owe on your mortgage). Typically, lenders look for homeowners to have at least 15% equity to qualify, and you can borrow up to 90% of that equity. HELOCs have two phases, the draw period and the repayment period.
The Draw Period
During the draw period, which lasts about 10 years, borrowers can use the credit line through an associated card, checks, or account transfers. You pay interest only on the amount you use, not the full credit line. Interest-only payments are often required during this time, with principal payments optional. If you do pay down your balance, you can borrow again as you need it.
The Repayment Period
The repayment period may last from 10 to 20 years. Borrowing ends, and you pay back the principal plus interest. HELOCs carry adjustable interest rates, so monthly payments can go up or down. Using a HELOC monthly payment calculator can help you estimate your bills with different balances and interest rates.
The Origin of HELOC Interest Rates
Lenders calculate interest rates for different types of home equity loans and HELOCs based on the prime rate, which is influenced by the Federal Reserve’s decisions. Each lender adds a margin to the prime rate, resulting in the variety of rates offered. By grasping these components, you can better anticipate rate changes and time your HELOC application for maximum benefit.
Individual borrower factors such as credit score, debt-to-income (DTI) ratio, and equity stake also play a role in the final rate. For this reason, you’ll want to take the time to get interest rate quotes and terms from multiple lenders so that you can see which one offers you the best deal.
How Interest Rates Impact HELOC Affordability
Even the smallest difference in HELOC interest rates can have a big impact on your finances. For instance, with a $50,000 balance and a 15-year repayment term, an 8.50% rate would mean a $492 monthly payment and $38,627 in interest over the life of the loan. But bump that rate up to 9.50%, and you’re looking at $522 a month. That’s probably not a budget breaker, but pay attention to the total interest you’ll pay: $43,980. That’s $5,300+ more than with the lower rate. And that’s why smart borrowers work to get the lowest interest rate available.
Keeping an eye on the prime interest rate is a smart move when you want to get equity out of your home. Since 2018, the prime rate has fluctuated quite a bit, hitting a low of 3.25% in 2020 and a high of 8.50% in 2023. Knowing this history can help you prepare for the potential range of your HELOC rate.
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
Adjustable vs. Fixed Interest Rates
With a HELOC, you’ll often find adjustable interest rates, which rise and fall with the market. They usually start lower than fixed rates, which can be appealing, but the trade-off is that your monthly payments are not as predictable. If that’s a compromise you can live with, then a HELOC might be in your future. If you prefer predictable monthly payments, then keep reading to learn about home equity loans.
Before you apply for a HELOC, use our online tools to help you estimate your monthly payments and interest costs. A home equity loan calculator can help you determine how much you can borrow. These tools can help you manage your budget and understand the impact of HELOC rates on your finances.
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
To secure a competitive HELOC rate, you’ll want to work on your credit score and your debt-to-income (DTI) ratio. Here are some tips to prepare before you apply.
Improve Your Credit Score
Your credit score is an important piece of the puzzle when it comes to securing the best HELOC rates. Lenders often look for scores of 700 or higher. Making timely payments and reducing credit card balances can give your credit score a significant lift. Be sure to check your credit report for any errors and dispute inaccuracies to help improve your score.
Calculate Your Debt-to-Income Ratio (DTI)
Your DTI ratio is a simple calculation of your monthly debt payments divided by your gross monthly income. Most HELOC lenders prefer a DTI below 36%, but the lower, the better. To get a sense of your DTI, tally up your monthly financial obligations — from your mortgage and student loans to your credit card minimums and auto payment — and divide this sum by your before-tax income. A lower DTI can work in your favor, potentially opening doors to more attractive HELOC terms.
Current HELOC rates by state.
Compare current HELOC interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
Application Process for a HELOC in Syracuse
Many lenders offer the convenience of prequalification for a HELOC online, making the process a relative breeze. This first step is a great way to get a sense of the rates and credit limits you could be eligible for, without the need for a full credit check. Once prequalified, the next step is the full application, which will require a bit more paperwork. Here’s how you can prepare.
Step 1. Run the Numbers
First off, check your credit scores and calculate your debt-to-income ratio. Then, take a look at your home equity (the difference between your home’s value and the balance of your original home loan). Is it above 15%? A HELOC interest-only calculator can give you a preview of what your initial interest-only payments might be. Armed with these metrics, you can move on to the next step.
Step 2. Compare Lenders
Comparing offers is about more than interest rates. There’s qualification requirements, loan minimums and maximums, fees, the length of the draw and repayment periods they’re offering, and other factors. Different lenders in Syracuse will have varying HELOC rates and terms, so it’s important to shop around and gather multiple quotes to find the best option for your financial situation.
Step 3: Submit Your Application
Now gather your papers: identification, proof of income, and details about the property. For income verification, you likely need your most recent pay stubs, W-2 forms, and tax returns. If you’re self-employed, they might ask for a profit-and-loss statement and two years of tax returns. And have a homeowners insurance declaration page ready. You can submit your application online, over the phone, or in person.
Step 4: Get an Appraisal
An appraisal is a professional and unbiased analysis that gives you and your lender a clear picture of your home’s current market value. The cost can vary, but appraisal fees range between $300 and $610. If your home’s appraisal comes in higher than what you owe, your lender might green-light a home equity line of credit (HELOC).
Step 5: Prepare for Closing
Before you can tap into your HELOC, there’s some paperwork to sign and fees to pay. The good news is, some lenders can get you your funds within three days after everything’s signed and sealed. Just be sure to go over all the details before you commit. While the closing costs for a HELOC are typically less than those for a mortgage, you might still have to cover appraisal fees, application fees, and other administrative costs.
Closing Costs and Fees
HELOC closing costs are generally lower than those associated with a home purchase or refinance. The most significant expense is often the appraisal fee, which can range from $300 to $610 or more. A title search, if required, might set you back $75 to $200. You could also face application, origination, and administrative fees, as well as annual maintenance fees (up to $250), transaction fees, or inactivity fees.
Tax Benefits and Considerations
Currently, homeowners can deduct HELOC interest if the funds are used to buy, build, or improve a primary residence. Consult a tax advisor to understand the tax implications and to determine if you qualify for a tax deduction related to a HELOC.
Alternatives to HELOCs
There are other ways to tap the equity in your home, including home equity loans, cash-out refinancing, and personal loans. Each option has its own pros and cons. Home equity loans give you a lump sum at a fixed rate, which can be good for large or immediate expenses. Cash-out refinancing can replace your current mortgage with a lower rate, but you’ll also have to pay closing costs. Personal loans are unsecured and may have higher rates, but you won’t risk foreclosure.
Home Equity Loan
What is a home equity loan? They’re quite different from HELOCs. With a home equity loan, you get a lump sum and a fixed interest rate. You can usually borrow up to 85% of your home’s equity. Lenders typically look for a credit score of 680 or higher, with many preferring 700 and above. These loans are great for big, one-time expenses, and if you like the idea of structured payments and a set interest rate, they could be just what you need.
Cash-Out Refinance
A cash-out mortgage refinance can be a smart move for those who want to tap into their home’s equity. It allows you to refinance your mortgage for a larger sum and pocket the difference in a lump sum. With a credit score of 620 or above and a debt-to-income ratio under 43%, you could be on your way to accessing more of your home’s value. Plus, you can choose between fixed or variable rates, with the latter potentially granting access to more equity.
Personal Loan
A personal loan is a versatile, typically unsecured financial tool that you pay back in fixed installments over a period of 2-7 years. The key advantage here is the separation of your home from the loan, meaning your home is not at risk of foreclosure in times of financial difficulty. Many lenders look for a credit score of 670 or higher when considering a personal loan application. While the process is relatively swift, the interest rates are typically higher compared to HELOCs and home equity loans.
The Takeaway
As you mull over the idea of a HELOC, it’s crucial to weigh the benefits against the potential pitfalls. The flexibility and potentially lower interest rates are appealing, but the risk of losing your home if you default is a serious consideration. By understanding HELOC rates and comparing them with other loan options, you can make a well-informed decision that aligns with your long-term financial goals.
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.
Your HELOC monthly payment can and will change based on the amount you owe and the current interest rate. If you draw the full $100,000 and secure an interest rate of 8.00%, you might make interest-only payments of $667 during the draw period, and monthly principal-and-interest payments of $836 over the 20-year repayment period. Just remember that your payments will vary along with the adjustable interest rate.
What are the benefits of a HELOC?
The perks of a HELOC are quite appealing. You’re looking at lower initial interest rates and the freedom to borrow as you need, and you only pay interest on what you actually withdraw. This financial tool is popular with homeowners who have big-ticket expenses on the horizon, be it home improvements, education, or medical bills. And in 2025, the interest you pay might just be tax-deductible if it’s used for home improvements.
Do you need an appraisal for a HELOC?
Yes, you usually do. An appraisal helps your lender understand the current market value of your home, which in turn helps them calculate the equity you have and the maximum credit limit they can offer. Appraisal fees can range from $300 to $600 and are often the highest expense associated with obtaining a HELOC. But here’s the good news: The closing costs for a HELOC are generally lower than those for home-buying or refinancing.
What could prevent you from securing a home equity loan?
A few things could stand in your way, such as having a credit score that’s too low, a debt-to-income ratio that’s too high, or not enough equity in your home. Lenders often look for a credit score of at least 680, a debt-to-income ratio of 43% or less, and 20% equity in your home. If you don’t meet these requirements, you might need to work on improving your financial situation or explore other loan options.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945. All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee. Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
This content is provided for informational and educational purposes only and should not be construed as financial advice.
• A HELOC is a flexible line of credit you can draw on as you need it.
• HELOC interest rates in Erie are variable and linked to the prime rate.
• To qualify for a HELOC, you typically need a credit score of 640 or higher and a debt-to-income ratio under 50%, though better numbers will get you better rates.
• A HELOC is easy to use for home improvements, debt consolidation, and other large expenses.
• A lender will require a home appraisal to determine the value of your property and the equity you have.
Introduction to HELOC Rates
Welcome to a comprehensive overview of home equity line of credit (HELOC) rates in Erie, Pennsylvania. We’re here to help you navigate deciding whether a HELOC is right for you and seeking out the best available interest rate and terms should you decide to move forward. You’ll learn about current rates and trends, how to compare lenders, and the key factors that influence HELOC rates. You’ll come away equipped with the knowledge to make a well-informed financial decision about borrowing.
What Exactly Is a HELOC?
A HELOC isn’t a lump-sum loan. It’s a revolving credit line secured by your home equity, which you have built up over time by paying off your home loan. To qualify for a HELOC, you typically need 15% equity in your home. You can often borrow up to 90% of that equity, but you’ll only need to pay interest on the amount you actually borrow. An important fact is that if you don’t make payments on your HELOC, you risk foreclosure. A HELOC has two phases, draw and repayment.
The Draw Period
During the draw period, which usually lasts 10 years, you can access funds as needed, make interest-only payments, and re-borrow up to your credit limit if you repay the principal. You may find it helpful to have a HELOC interest-only calculator on hand to estimate your payments.
The Repayment Period
Next you hit the repayment period, which lasts 10 to 20 years and requires you to make monthly principal-plus-interest payments. HELOCs have variable interest rates so monthly payments can change over the 10 or 20 years of the term. A HELOC monthly payment calculator will be handy.
HELOC interest rates tend to track the prime rate, which in turn follows the Federal Reserve’s lead. Each lender tacks on a margin to the prime rate, creating a range of HELOC rates in the marketplace. Your individual financial profile, including your credit score, debt-to-income ratio, income, and home equity level, will also influence the rate you’re offered. This is why it’s important to seek out rate quotes and study the terms of multiple lenders before you lock in a lender for your HELOC.
How Interest Rates Impact HELOC Affordability
The interest rate on your HELOC can make a big difference in your monthly payments and the total amount of interest you’ll pay over the repayment term. Even a seemingly small difference in the rate you pay can have a noticeable impact. If you borrow $50,000 with a HELOC and have a 10-year repayment term and an interest rate of 8.00%, your monthly payment would equal $607 and total interest paid would be $22,797. But if you managed to get a 7.50% rate, your monthly payment would shrink to $581 and total interest would be $19,665. That’s a savings of over $3,000. (Of course, due to the HELOC’s variable rates, your real-world numbers would be different.)
HELOC Interest Rate Trends
While no one can predict the future of rates, keeping an eye on the prime rate and having a sense of its history can offer valuable insights. The prime rate hit a low of 3.25% in 2020 and a high of 8.50% in 2023. Consider that when you see quotes from lenders. Some borrowers try to wait out the market and apply for a HELOC when rates bottom out. But it simply may not be feasible for you to do the same. If you need a credit line now — for a renovation, perhaps — then focus on getting the best available rate.
Historical Prime Interest Rate
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
As we’ve seen, HELOCs often come with variable (also known as adjustable) interest rates, which can change based on the market. These rates may start off lower than fixed rates. But, because they can change, your monthly payments might go up or down. Fortunately, your HELOC agreement will list the built-in controls that dictate how large a change you might see in your rate, when it can adjust, and whether there is a rate cap. Study all this as you are considering HELOC offers.
Helpful Tools & Calculators
Before you make a decision about how to borrow, take advantage of online tools to get a good grasp of what monthly payments and interest costs might look like.
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
To secure a competitive HELOC rate, you’ll need to meet specific financial benchmarks. In addition to ensuring you have at least 15% equity in your home (and ideally more), you’ll need to tackle these two tasks:
Improve Your Credit Score
Pushing your credit score to 700 or higher is a wise move if you want the most favorable HELOC rates. You can get closer by making sure your payments are always on time and reducing credit card balances. Avoid opening new credit accounts or closing old ones, as this can have a negative impact on your score. And review your report to make sure there are no inaccuracies dragging your score down. You can get approved for a HELOC with a score of 640 or better, but aim higher to save on interest.
Calculate Your Debt-to-Income Ratio (DTI)
To determine your DTI ratio, divide your total monthly debt payments by your gross monthly income. For HELOC lenders, a DTI ratio below 36% ticks the box for the best rates, although you can get a HELOC with a DTI as high as 50%. Polish your DTI ratio by paying down debt, increasing your income, or both.
Current HELOC rates by state.
Compare current HELOC interest rates by state and find a HELOC rate that suits your financial goals.
Select a state to view current rates:
Application Process for a HELOC in Erie
You can make the application process for a HELOC in Erie somewhat easier by prequalifying online. Many lenders offer the option to prequalify on their website. This can give you a quick estimate of the rates and terms you might qualify for. Then follow these steps:
Step 1. Run the Numbers
In addition to checking your credit score and DTI ratio following the instructions above, you’ll want to examine your equity to make sure you have at least 15%. Look up your home value on a real estate site. Subtract whatever you owe on your mortgage from that number, then divide the result by your home value to arrive at a percentage of equity.
Step 2. Compare Lenders
Determine what offers you might qualify for when it comes to interest rates, but also look at lenders’ qualification requirements, minimums and maximums, fees, and the length of the draw and repayment periods. Lenders in Erie have different HELOC rates and terms, so it’s important to compare them.
Step 3: Submit Your Application
Gather recent pay stubs, W-2 forms, and tax returns before you start applying. If you’re self-employed, a lender might request a profit-and-loss statement and a couple years’ worth of tax returns. Also have your homeowners insurance documents handy. Doublecheck the info you’ve filled in and then submit your application. You can apply online, over the phone, or in person, depending on the lender.
Step 4: Get an Appraisal
An appraisal will establish your home’s value, which will determine officially your equity level and how much you might borrow with a HELOC. It typically costs between $300 and $610. A prospective lender will tell you what kind of appraisal is required, so wait for the lender’s instructions.
Step 5: Prepare for Closing
Before you can access your HELOC funds, you’ll need to sign the documents and pay fees. Some lenders can make the funds available as soon as three days after the HELOC is closed. Prepare for the closing by giving all the documents a thorough review and making sure you’re clear on the terms and conditions. Have the necessary funds ready to cover the closing costs.
Closing Costs and Fees
The good news is that HELOC closing costs are generally more wallet-friendly than those for a home purchase or full refinancing. The appraisal fee is often the most substantial cost. You might also encounter a title search fee (ranging from $100 to $450), application, origination, and administrative fees, as well as the possibility of annual maintenance and withdrawal fees.
Tax Benefits and Considerations
As a homeowner, you have the potential to deduct HELOC interest. Right now, you’ll need to use the funds to substantially improve your primary residence in order to claim the interest as a deduction on federal taxes. This tax could change in the future, so consult with a tax advisor to understand the specific tax implications of a HELOC.
Alternatives to HELOCs
In addition to HELOCs, there are other ways to get equity out of your home. One option commonly confused with a HELOC is a home equity loan, so take a minute to learn what a home equity loan is, and also find out about cash-out refinancing and personal loans.
Home Equity Loan
With a home equity loan, funds come all at once and you begin paying them back, with interest, immediately. The repayment term might be 10, 20, or 30 years. Usually, you can tap into 85% of your home equity. Lenders often look for a credit score of 680 or more, but as with a HELOC, better rates often go to those with a score of 700 or above. As you consider a HELOC vs. a home equity loan, the fact that the latter has a fixed interest rate is a point of differentiation.
Cash-Out Refinance
A cash-out refinance replaces your mortgage with a new, larger one; you take the difference as cash. This mortgage refinance might be right for you if you can score an interest rate that is an improvement on your current one (remember to factor in closing costs). To qualify, you’ll need a 620 credit score and a DTI ratio of under 43%. When comparing a cash-out refinance vs. a home equity line of credit, the more forgiving credit and DTI numbers on a refi may be attractive.
Personal Loan
A personal loan is a versatile, typically unsecured loan that you repay in regular, fixed installments over a term of two to seven years. The key advantage here is that your home is not on the line should you face financial challenges. Many lenders look for a credit score of 610 or more for a personal loan. While they are relatively quick to secure, do note that these loans often come with higher interest rates than either a HELOC or a home equity loan.
The Takeaway
When considering a HELOC, it’s important to weigh the benefits and risks. HELOCs offer flexibility and potentially lower interest rates than personal loans. They are well-suited for covering ongoing expenses like home renovations or debt consolidation. However, they come with the risk of losing your home if you default. Before applying, assess your financial health, compare HELOC rates, and consider alternatives like cash-out refinances or personal loans. Most importantly, compare interest rate offers from multiple lenders to find the best rate.
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.
The monthly payment on a $100,000 HELOC can fluctuate depending on how much of the credit line you have used and the current interest rate. If you borrow the full $100,000 during the draw period and have an 8.00% rate, you might only pay around $667 per month, covering the interest. Once the repayment phase kicks in, you would start paying down the principal, which will adjust your monthly payment upward to $1,213.
Do you need an appraisal for a HELOC?
An appraisal is typically required for a HELOC. This step is important as it determines your home’s current market value, which in turn helps to calculate the amount of equity you can borrow against. Getting a professional appraisal according to your lender’s instruction is key to securing the best HELOC terms.
How hard is it to secure a HELOC?
Gaining approval for a HELOC is within reach if you meet the lender’s criteria. Lender requirements vary, but the basic prerequisites are a credit score of at least 620, a debt-to-income ratio below 50%, and a home equity level of 15%. The best interest rates go to those with a credit score of at least 700 and a DTI ratio under 36%. The application process includes submitting financial records and arranging for a home appraisal.
Will a HELOC affect your credit score?
The mere act of opening a HELOC can cause a slight dip in your credit score due to the necessary hard credit inquiry by a prospective lender. But use your HELOC responsibly — make timely payments and keep balances in check — and you may actually see an improvement in your score. On the flip side, missing payments or maxing out your HELOC can be detrimental.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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