Compare HELOC rates in Nebraska.

Introduction to HELOC Rates

What is known as a home equity line of credit, or HELOC, is a revolving line of credit that works like a credit card but is secured by your home’s equity. Factors like economic conditions, the federal funds rate, and the borrower’s financial profile influence HELOC rates. If you understand these factors, it can help you navigate the market and get the best available HELOC deal.

What Is a HELOC?

A home equity line of credit enables homeowners to borrow against the equity they’ve built in their home. You can borrow as much as 90% of your home’s value, minus what you still owe on your mortgage. Because a HELOC works like a credit card, you don’t have to borrow the entire amount at once. You can withdraw money in increments as you need it. HELOCs are secured by your home and generally have a better interest rate than credit cards or personal loans.

A HELOC has two phases. The first is the draw period, and the second is the repayment period. It’s important to understand the difference between the two.

The Draw Period

During the HELOC’s draw period, which is usually 10 years, you can access funds up to your credit limit. You may make payments on your balance and borrow the money again. You’ll most likely be required to make interest payments during the draw period, but paying down the principal may be optional. This flexibility allows you as a homeowner to manage your finances effectively during the HELOC draw period.

The Repayment Period

The repayment period tends to last 10 to 20 years. During this phase, borrowers must repay the principal as well as interest. Plugging possible rates and terms into a HELOC repayment calculator can help you understand monthly payments and the overall interest you might be responsible for.

Where Do HELOC Interest Rates Come From?

HELOC rates are based on the prime rate, the benchmark interest rate for a lender’s most creditworthy customers. Not every borrower gets a lender’s best rate. Other factors also influence what applicants may have access to.

How Interest Rates Impact HELOC Affordability

Interest rates have a significant impact on a home loan. A 1% fluctuation in the interest rate may result in a borrower paying thousands of dollars in additional interest over the loan’s life. Here’s an example. A $50,000 HELOC, if repaid over 20 years, will result in different payments at different interest rates:

•   At 6.00%: monthly payment $358, total interest paid $35,972

•   At 7.00%: monthly payment $388, total interest paid $43,036

•   At 8.00%: monthly payment $418, total interest paid $50,373

HELOC Interest Rate Trends

Interest rates on HELOCs closely follow the prime rate. Anticipating potential rate fluctuations can help you make an informed decision about when to apply for a HELOC.

Historical Prime Interest Rate

The prime rate has ranged in recent history from a low of 3.25% in 2020 to a high of 8.50% in 2023.

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Other variables besides the prime rate also impact HELOC rates in Nebraska. If you are a borrower, those variables will include your home equity position, credit score, income, and combined loan-to-value (CLTV) ratio. Get savvy about these influences, and you’re more likely to succeed at securing the most competitive HELOC rate.

Home Equity

Having a lot of equity in your home can make you a less risky borrower to lenders, allowing you to secure better interest rates. Homeowners usually need 15% equity, at least, in their property to qualify for a HELOC. Building equity ups your financial flexibility and borrowing power.

Credit Score

Maintaining a credit score of 680 or higher will help you secure a HELOC, and some lenders look for a credit score of 700 or above. To any lender, a higher score is a strong indicator of reduced risk. It increases your chances of scoring competitive rates and terms.

Stable Income

To determine your capacity to repay a HELOC, lenders will evaluate your income. A steady flow of income assures them that you’re less likely to default, and will potentially result in more favorable HELOC rates. If you can present evidence of continuous employment and consistent earnings, your application will be stronger.

Loan-to-Value Ratio

Most lenders require you to show a combined loan-to-value ratio (mortgage balance plus HELOC amount / appraised home value) of 90% or less. Some will allow you to borrow 100% of your home’s value, however.

This ratio is key when lenders determine your credit limit. Assume your home value is $500,000, your mortgage balance is $300,000, and your HELOC balance is $100,000. Your LTV ratio would then be 80%: $300,000 + $100,000 / $500,000.

Variable vs Fixed Interest Rates

HELOCs usually feature variable interest rates. That means the interest rate on your home equity line of credit can change over the life of the loan. Variable rates often start lower than fixed rates. They will then fluctuate with the market. Variable rates can be unpredictable and will jump if the market does. If that stresses you out, you may want to look at different types of home equity loans, since they typically carry fixed rates.

Tools & Calculators

One way to understand how your interest rate will affect your monthly payments and the total cost of borrowing is to use an online calculator. You can plug different interest rates into one of these, including the home equity loan calculator, to get an idea of how rates impact payment amounts.

How to Qualify for a Competitive HELOC Rate

To secure the best HELOC rates possible in Nebraska, you’ll need to make sure your credit score is at its best, among other things. Here’s what to do before you apply:

Take Care of Your Credit Score

By keeping up with monthly payments and chipping away at any credit card balances you’re carrying, you’ll not just tidy up your finances, you’ll also nurture your credit score. And guess what? A higher credit score means you’re a more attractive candidate for a home equity line of credit. Take time to review your credit reports and correct any inaccuracies as you go.

Assess Your Home Equity

A necessary step in applying for a HELOC is making sure you have at least 15% equity in your home. You build equity by making your monthly mortgage payments on time as well as by making home improvements. Equity grows too, if the market value of your home increases. The more equity you’ve got, the better terms you may get on a HELOC.

Calculate Your Debt-to-Income Ratio (DTI)

Your DTI ratio isn’t difficult to figure out: It is your total monthly debt payments (car loan, student loan, etc.) divided by your gross monthly income. Some lenders will allow a DTI below 50%, while others require 36% or less. Generally, the lower the better. This number will be a key player in a lender’s determination of your eligibility for a HELOC, as well as the terms you’re offered.

Application Process for a HELOC in Nebraska

Applying for a home equity line of credit involves several steps, from an initial evaluation of your financial situation to a formal application, a home appraisal, and more. Here’s a step-by-step.

Step 1. Crunch the Numbers

Before you take the plunge and apply, it’s crucial to size up your financial standing by compiling your credit score and DTI ratio info. Some home equity line of credit lenders offer a convenient online prequalification process for a HELOC. That can help you figure out if your stats are good enough to win you a stamp of approval. A HELOC monthly calculator can also be helpful as you consider whether you can comfortably navigate the repayment phase.

Step 2. Compare Lenders

You should look at posted interest rates and also check on lenders’ qualification demands, credit line limits, fees, and the durations of their draw and repayment periods. Plug different interest rates and loan terms into a HELOC monthly calculator. This will help you get a sense of which lenders might be a good fit for you.

Step 3: Gather Your Documents

Before you apply for a HELOC, you’ll need to gather the following documents: your last few pay stubs, your most recent tax return, a recent mortgage statement, and a few bank statements. If you’re self-employed, have at least two years of tax returns on hand. Having these documents when you apply should help the process go smoothly.

Step 4: Submit Your Application

Once you’ve got everything sorted, it’s time to submit your application. You can do this online, over the phone, or in person — it depends on the lender and your preference. Make sure you double-check everything before you hit “send” or “submit” to avoid any snafus going forward.

Step 5: Get an Appraisal

The home appraisal is central to the HELOC process, since your property’s market value helps determine how much equity you have and how much credit a lender might be willing to extend.

Step 6: Prepare for Closing

Before you get your hands on the cash, you’ll need to sign the paperwork and take care of any fees the lender charges. The good news is, many are quick to get the funds to you — often within three business days of the signing.

Tax Benefits and Considerations

If you use HELOC funds to buy, build, or make a significant improvements to your home, you may be able to deduct the interest you pay on the first $375,000 borrowed as an individual taxpayer ($750,000 if you’re married and filing jointly). A smart thing to do is to consult with a tax advisor for specifics — that way you can make the most of deductions related to your home equity line of credit.

Closing Costs and Fees

HELOC closing costs may be less than those you’d pay when you buy a home. One larger expense is typically the appraisal fee, which may range from $300 to $600. You may also encounter application, origination, and administrative costs. Some lenders add annual maintenance fees and other charges.

Alternatives to HELOCs

You can find alternatives when researching how to get equity out of your home. Financing options other than HELOCs include home equity loans, cash-out refinancing, and personal loans. Each has its own benefits and drawbacks:

Home Equity Loan

Unlike a HELOC, a home equity loan comes to you in a lump sum. The lowdown on what is a home equity loan: You can often tap into 85% of your home’s equity with one of these fixed-rate loans. This is a different type of loan entirely, but the qualification process is similar to that for a HELOC (you’ll need that appraisal!).

Another factor in any HELOC vs. home equity loan comparison is that you begin repaying a home equity loan immediately. Since it has a fixed interest rate, payments remain the same over the loan term, which may range from 5 to 30 years. To get a sense of what you could borrow and to compare the two options, use a home equity loan calculator.

Cash-Out Refinance

For homeowners, cash-out refinancing is another good way to leverage your home’s value. This type of mortgage refinance is an option for those who need a large sum of money all at once.

When comparing a cash-out refinance vs. a home equity line of credit, note that cash-out refinancing might come with a higher interest rate than that of your current home loan. Look at the monthly payment and total interest you’ll pay on both to help you determine which makes better sense.

Personal Loan

A personal loan is a lump sum loan with fixed payments made over 2–7 years. This loan can be used for almost any purpose, and you don’t have to offer your home as collateral to get it. Personal loans, however, often have higher interest rates than HELOCs or home equity loans.

Credit Cards

Not surprisingly, credit cards often have steeper interest rates than HELOCs. Cards are known to balloon your costs if you’re juggling a hefty balance. While they are handy for everyday buys, HELOCs beat credit cards when it comes to big-ticket items like home upgrades or debt consolidation.

The Takeaway

When considering a HELOC, carefully weigh the advantages and disadvantages. A home equity line of credit can provide a versatile source of funding for a variety of financial needs. But it’s essential to understand the interest rate, fees, and repayment terms before making a decision.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What’s the monthly payment on a $50,000 HELOC?

If you have an 8.00% interest rate and a 10-year term, your monthly payment will be about $607. The same 8.00% interest rate over a 20-year term would cost you $418 monthly, but you would pay more total interest during the 20-year term. In every case, exactly how much you’ll pay will depend on your interest rate and repayment term.

Is a HELOC a smart move for you?

Whether a HELOC is a brilliant idea right now depends on your financial situation and goals. HELOCs can be beneficial for making home improvements, consolidating debt, or covering other large expenses. It’s important, however, to consider the interest rates, fees, and any potential impact on your home equity before you make a decision.

What’s the monthly payment on a $100,000 HELOC?

The monthly payment on a $100,000 HELOC depends on the interest rate and how long a term you’ve chosen. At a 6.00% interest rate over 20 years, the payment would be $716 per month. An interest rate of 8.00% and the same term would require a payment of $836.

What are the benefits of a HELOC?

A HELOC is flexible. Rather than drawing a lump sum, you can borrow in increments according to your needs, and at a rate that is typically lower than you’d get with a credit card. And you only pay interest on what you borrow at any given time.

Do you need an appraisal for a HELOC?

Yes, you need the appraisal. It’s a crucial step in the process, as it helps to establish your home’s value, which helps determine the amount you can borrow. Lenders want to be sure your loan can be secured by equity in your home. Your lender will provide details about the type of appraisal required.

What might prevent you from qualifying for a home equity loan?

Several factors can disqualify you from getting a home equity loan, including bad credit, not enough home equity, and a high level of debt relative to your income.

How hard is it to get a HELOC?

Assuming you meet lenders’ requirements — healthy credit score, manageable debt levels, and a minimum of 15% equity — it shouldn’t be hard to get a HELOC. The most difficult part for many would-be borrowers is compiling the financial documents for the application. But taking the time to do that thoroughly and accurately will help move the application process along more quickly.

How does a HELOC affect your credit score?

When you apply for a HELOC, the lender will perform a hard inquiry on your credit report, and that may cause a small, temporary decrease in your credit score. Carrying a large balance on your HELOC could also negatively impact your credit utilization ratio, lowering your credit score. But if you make regular payments toward your HELOC, you will show that you can use credit responsibly and that should coax your score up again.

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.

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.

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 .

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.

SOHL-Q424-037

Compare HELOC rates in Ohio.

Introduction to HELOC Rates

If you’re looking for the best HELOC rates in Ohio, comparing offers from different lenders can help you save money. But so can understanding how factors like your home equity and credit score influence the rates you’ll receive. This article will give you a solid grounding in HELOCs, also known as home equity lines of credit.

You’ll gain valuable insights into all the factors that influence HELOC rates, plus the strategies to secure the best available deals and information about other types of home equity loans.

Let’s start at the beginning: What is a home equity line of credit, anyway?

What Is a HELOC?

A HELOC is like a credit card with a spending limit based on your home’s value minus whatever you still owe on your home loan. You can borrow up to 90% of your home’s value. Because a HELOC is secured by your home, its interest rate will be lower than the rate you would get with a personal loan or credit card. But take note: HELOCs have variable rates, so the rate can adjust up (or down) over time.

A HELOC has two phases, draw and repayment. Let’s take a closer look at how they differ.

The Draw Period

During the draw period of a HELOC, which typically spans a decade, you can withdraw funds up to the limit of your credit line. You’ll probably have to make interest payments, but you likely won’t have to pay down the principal (although if you do, then you can borrow again up to the credit line). This flexibility is helpful if, say, you need to borrow money for a renovation but you don’t need it all at once. It’s also useful if you’re funding a big renovation, but don’t know exactly how much you need.

The Repayment Period

The HELOC repayment period, usually 10 to 20 years, involves paying back the principal plus interest. A HELOC repayment calculator can help you estimate your payments as the variable interest rate changes.

Where Do HELOC Interest Rates Come From?

HELOC interest rates are tied to the prime rate that banks and other lenders set, which in turn is tied to the Federal Reserve’s rate decisions. Lenders offer their prime rate to their most creditworthy customers. But the prime rate isn’t for everyone, and lenders adjust the rate they give each individual customer based on the applicant’s personal financial metrics (more on that later).

How Interest Rates Impact HELOC Affordability

Interest rates exert a significant influence on the affordability of HELOCs. Over a 20-year term, a seemingly small 1% difference in interest rate can result in a substantial amount of additional interest paid, as you’ll see in the chart below. (The chart also shows how the payment term can affect your monthly payments and total interest paid.)

HELOC Interest Rate Trends

HELOC rates closely follow the average prime rate, so it helps to be familiar with how rates have risen and fallen in recent years before you start searching for your best possible rate. The average prime rate hit a low point of 3.25% in 2020 and a high of 8.50% in 2023. To understand how unusual that 3.25% was, take a look at the graphic below, which shows 50+ years of the average prime rate.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

The prime rate isn’t the only important data point that will be involved if you decide to apply for a HELOC. There are plenty of other factors that influence what rate you, specifically, will be offered. Make sure your stats are working in your favor in each of these categories:

Home Equity

Generally, a minimum of 15% to 20% equity is required to qualify for a HELOC. But having more significant home equity places you in a lower-risk category for lenders, potentially leading to reduced interest rates.

Credit Score

A credit score of 680 or higher is a good entry point for a HELOC, but again, higher is better and some lenders prefer that the number tops 700.

Stable Income

A steady stream of income serves as a reliable indicator of reduced default risk, which often translates into more favorable HELOC rates. By maintaining consistent employment and a steady income, you can significantly bolster your prospects of securing good terms for your HELOC.

Loan-to-Value Ratio

Most lenders require your combined loan-to-value ratio to be 90% or less. (Your CLTV is your current mortgage principal owed plus the amount you wish to borrow divided by your home’s appraised value.)

Variable vs Fixed Interest Rates

HELOCs are characterized by variable interest rates that are subject to change over the course of the HELOC term. Initially, variable rates are lower compared to standard fixed rates, but they can be adjusted upward or downward in line with market conditions. Understanding this distinction can empower you to make an informed decision regarding your choice of a HELOC or a home equity loan.

Tools & Calculators

These tools will serve as invaluable aids in estimating your payments and shedding light on the financial implications of a HELOC.

How to Qualify for a Competitive HELOC Rate

Now that you understand what factors help determine the HELOC rate you’ll be offered, there are a few things you’ll likely want to do before you begin the application process.

Care for Your Credit Score

Maintaining timely payments and reducing credit card balances can help you cultivate the kind of credit score lenders like to see. Also take time to review your credit report and promptly address any errors.

Assess Your Home Equity

Regular mortgage payments have helped you build home equity over time. To make sure you have the minimum 15% equity you’ll need for a HELOC, do some math. Locate your home’s estimated price on a real estate web site. Subtract what you still owe on your mortgage from your home price. Then divide the result by your home’s estimated price. This will give you a percentage of equity.

Calculate Your Debt-to-Income Ratio (DTI)

Your debt-to-income (DTI) ratio is a crucial metric in determining your financial health. It is calculated by dividing your total monthly debt payments by your gross monthly income. Home equity lenders generally like to see a DTI below 36%, but the lower your DTI, the better your chances of securing favorable HELOC rates in Ohio.

Application Process for a HELOC in Ohio

The application process for a HELOC will include a thorough assessment of your financial well-being, so you’ll need to provide quite a bit of information. You’ll want to compare interest rates offered by various lenders, as well. Here are the steps:

Step 1. Run the Numbers

Assessing your financial situation before you apply is essential. Check your credit score (is it at least 680?). Calculate your DTI ratio to be sure it’s under 36% — ideally well under. And estimate your home equity. Some lenders allow you to prequalify on their website.

Step 2. Compare Lenders

See what offers and interest rates you might qualify for. Compare lenders’ requirements, loan minimums and maximums, fees, and other details. Make sure you know the duration of the lenders’ draw and repayment periods.

Step 3: Gather Your Documents

Begin putting together all the necessary documents before you plan to apply. Required items are typically proof of income such as recent pay stubs and your latest tax return, employment history, and a basic estimate of your home’s value. Having these documents ready will speed up the application process.

Step 4: Submit Your Application

Once you have all your documents ready, you can file your HELOC application. This can often be done on the internet, by phone, or in person at the lender’s office. To avoid potential processing delays, make sure all information you provide is accurate.

Step 5: Get an Appraisal

After you submit your application, a lender may request a home appraisal. This is necessary to determine your home’s current market value. If an appraisal shows the value of your home exceeding your mortgage’s outstanding balance, the lender may approve you for a HELOC.

Step 6: Prepare for Closing

Before you’re granted access to HELOC funds, the lender will require you to sign a HELOC agreement and pay fees. Certain lenders may make funds available within three days after closing. Make sure you understand all terms and conditions.

Tax Benefits and Considerations

Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Deductions are limited to the interest on the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). A tax advisor can help you confirm eligibility for deductions related to HELOCs.

Closing Costs and Fees

HELOC closing costs are lower than home-buying or cash-out refinance costs. An appraisal fee, $150 to $500, is often the highest expense. Other costs include application, origination, and administrative fees. Some lenders charge annual maintenance and transaction fees. Lenders may reduce or waive closing costs but may increase the interest rate.

Alternatives to HELOCs

In addition to HELOCs, there are other ways to get equity out of your home, as well as financing options that don’t involve tapping into your home equity.

Home Equity Loan

Unlike HELOCs, home equity loans provide borrowers with a fixed lump sum that is paid back at a set interest rate. Homeowners can generally access up to 85% of their equity through a home equity loan, making it a popular option for those seeking to borrow against the value of their property.

Here’s a quick look at HELOCs vs. home equity loans:

Cash-Out Refinance

This special type of mortgage refinance allows homeowners to tap into their home equity by refinancing their existing mortgage for more than they owe and taking the difference in cash. This option can be beneficial for those needing a substantial lump sum.

If you’re considering a cash-out refinance vs. a home equity line of credit, one important thing to think about is the interest rate for the refinance, and how it compares to the rate you currently have.

Personal Loan

A personal loan, a flexible and typically unsecured loan, is repaid in regula payments over a term of 2 – 7 years. This option does not necessitate using your home as collateral, unlike a HELOC. The downside is that the interest rate will likely be higher than it would be on a HELOC or home equity loan.

Credit Cards

Credit cards also typically come with a higher interest rate than HELOCs, so this can be an expensive choice if you carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, a HELOC is often a more suitable solution for larger expenses such as home improvements or debt consolidation.

The Takeaway

When searching for the best HELOC rates in Ohio, it’s vital to compare offers from multiple lenders. Factors like your credit score, how much equity you have, and your DTI ratio significantly influence the rates you’ll receive. Improving your financial standing before you apply and shopping around can help secure the most competitive rates.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What is the monthly payment on a $50,000 HELOC?

With an 8.00% interest rate and a 10-year term, your monthly payment will be $607. But exactly how much you’ll pay will depend on your interest rate and loan term. Borrowing $50,000 with an 8.00% interest rate over a 20-year term would cost you $418 per month, although you would pay more total interest with the 20-year term.

Is a HELOC a smart move for you?

HELOCs can be beneficial. They offer flexibility and can be utilized for any purpose — and best of all, you only pay interest on the amount of the credit line that you are using. However, it’s imperative to carefully consider the variable interest rates, which have the potential to increase (or decrease) over time with market conditions.

What is the monthly payment on a $100,000 HELOC?

The monthly payment on a $100,000 home equity line of credit could be $700 to $850 depending on the interest rate available in the current market (and assuming you have a 20-year repayment term).

What are the benefits of a HELOC?

The best thing about a HELOC for most people is its flexibility. You borrow what you need when you need it versus taking a lump sum. And you only pay interest on the amount of the credit line that you have used. With many HELOCs, you can pay only interest during the draw period.

Do you need an appraisal for a HELOC?

You will need an appraisal as part of your application for a HELOC, but you shouldn’t request one until you have instructions from the lender about what is required.

What disqualifies you from getting a home equity loan?

There are several factors that can disqualify you from getting a home equity loan, including bad credit, not enough equity in your home, and a high level of debt relative to your income.

How difficult is it to get a HELOC?

The difficulty of getting a home equity line of credit will depend on your financial situation. Lenders consider your credit score, home equity, debt-to-income ratio, and income stability. Improving these before you apply can make the process smoother.

Does HELOC affect credit score?

A HELOC may affect your credit score in a few ways. Applying for a HELOC may result in a hard inquiry, which can temporarily lower your score. Also, high utilization of your credit line can negatively impact your score. But making timely payments on your HELOC can improve your score over time.

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.

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.

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 .

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.

SOHL-Q424-045

Compare HELOC rates in Delaware.

Introduction to HELOC Rates

If you’re investigating how to get equity out of your home and what the going rates are for HELOCs in Delaware, you’ve come to the right place. This guide aims to help homeowners understand how to secure the best available rates on HELOCs and other home loans in the First State. We’ll walk you through the HELOC application process, and share tricks for building your credit score before you apply.

But first, let’s make sure we’re all on the same page regarding what is a home equity line of credit.

What Is a HELOC?

A HELOC is a revolving credit line based on your home’s equity. You can typically borrow up to 90% of your home’s value, minus your mortgage, though some lenders will allow you to borrow 100% of your equity. Because a HELOC works something like a credit card, you can take the money in increments, as you need it. And because you put up your home as collateral, you get a much lower interest rate than with a credit card or unsecured personal loan. The HELOC’s flexibility and lower rates are what make them so popular.

A HELOC has two phases: draw and repayment. Here’s a look at each stage.

The Draw Period

During the draw period, which is usually 10 years, you can access funds up to your credit limit. Interest-only payments are typically required, but principal payments may be optional. If you do choose to pay down your principal, you can borrow that money again, over and over. For some homeowners, a HELOC serves as a supplemental emergency fund, there to cover larger expenses at a lower interest rate than a credit card.

A HELOC interest-only calculator can show you what your minimum payment might be, based on your HELOC amount and your interest rate.

The Repayment Period

During the repayment period, which is typically 10 to 20 years, borrowing ends and the principal is paid back with interest. You pay interest only on the amount borrowed, not the full credit line. You should be prepared for variable interest rates to fluctuate during the repayment period. As a result, your monthly payment could rise unexpectedly.

A HELOC repayment calculator can help you predict the upper limit your monthly payment might reach, so you can budget accordingly.

Where Do HELOC Interest Rates Come From?

Each bank sets its own HELOC interest rates. They do that based on the prime rate and a variety of economic and housing market factors. The prime rate is the benchmark interest rate for a bank’s most creditworthy customers. Understanding these factors can help borrowers in Delaware search out the best available rate for their financial profile, anticipate rate fluctuations, and make more informed financial decisions.

How Interest Rates Impact HELOC Affordability

Interest rates have a significant impact on the overall affordability of a HELOC. Over a 20-year repayment term, even a 1% difference in interest rate can result in thousands of dollars in additional interest. See the chart below for how different draw amounts, interest rates, and repayment terms affect monthly payments (a little) and total interest paid (sometimes a lot!):

HELOC Interest Rate Trends

As we mentioned, interest rates on HELOCs closely follow a lender’s prime rate. Familiarizing yourself with the prime rate and its regular ups and downs can be helpful when investigating the best available rates on HELOCs in Delaware.

Historical Prime Interest Rate

Since 2018, the prime rate has fluctuated significantly, reaching a low of 3.25% in 2020 and a high of 8.50% in 2023. You can assume that HELOC rates in Delaware will be in the same ballpark, and that changes in the prime rate will be followed by similar adjustments in HELOC rates.

Below the table, the chart shows you the average prime rate over the last 50 years. It has rarely dropped below 4.00% or risen above 10.00%.

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Now for Part 2 of Where Do HELOC Rates Come From? The prime rate is only half the story. The other half comes down to you, the borrower. When you apply for different types of home equity loans, including HELOCs, the lender examines your financial profile and sets your rate according to how big a risk you pose. Here’s what lenders are looking at:

Home Equity

Typically, homeowners need at least 15% equity to qualify for a home equity line of credit. But higher is better, and will determine how much you’re able to borrow through your credit line.

Credit Score

Maintaining a credit score of 680 will help your HELOC application get approved. A score over 700 will secure you a better interest rate. In fact, the higher your score, the better the rates you’ll be offered. Lenders tend to reserve their best, or prime, rates for borrowers in the Excellent credit score range of 800 to 850.

Stable Income

Lenders evaluate your income to determine your ability to repay the HELOC. That means not just the amount you earn, but how long you’ve been in your current role, which indicates financial stability.

Loan-to-Value Ratio

When you apply for a HELOC, lenders will take your desired HELOC amount and plug it into a simple formula to determine your loan-to-value ratio. Many lenders require a combined loan-to-value ratio of 85% or less. Let’s say you applied for a $100,000 HELOC to cover major home renovations. If your home value is $500,000 and your mortgage balance is $300,000, your LTV ratio is 80%. Here’s the formula:

•  HELOC amount + mortgage balance / home value

•  $100,000 + $300,000 / $500,000 = 80%

Variable vs Fixed Interest Rates

HELOCs feature variable interest rates, which fluctuate throughout the loan term. Variable rates have pros and cons. One pro is that variable rates typically start out lower than fixed rates. Another pro: If rates go down after you close on your HELOC, your interest will likely go down too! You can probably guess the main con here. If interest rates go up, so will your HELOC rate, meaning you’ll have higher payments than you anticipated.

Tools & Calculators

SoFi’s suite of tools includes a home equity loan calculator and several HELOC calculators. These can help borrowers anticipate their monthly payments in different phases of the HELOC. That way, your variable interest rate won’t pose any surprises down the road.

Tips to Secure a Competitive HELOC Rate

Now you know what goes into HELOC interest rates in Delaware. But can you really do anything to optimize those variables before you apply? The answer is a resounding yes! Here’s your To Do list:

Assess Your Home Equity

The first thing is to assess your home equity. This will tell you if you even qualify for a HELOC, and what your maximum credit line might be. Locate your home’s current estimated price on a real estate web site. Subtract what you still owe on your mortgage from your home price. Then divide the result by your home’s estimated price. This will give you a percentage of equity. Remember, you need at least 15% equity to qualify, but you’ll need much more if you want a large credit line.

Build Your Credit Score

Making timely bill payments and reducing credit card balances can significantly enhance your credit score. That means no late payments. And whenever possible, make more than the minimum payment on hyour credit card bills.

Calculate Your Debt-to-Income Ratio (DTI)

Your DTI ratio is how much you owe in monthly debt payments divided by your gross monthly income. Home equity lenders generally look for a DTI that’s below 36%, but the lower your DTI, the better.

Let’s say you make $8,000 a month before taxes. You have a $500 student loan, a $700 car payment, and a $1,400 mortgage payment. Here’s the formula:

•  Monthly debt payments / Gross monthly income

•  $500 + $700 + $1,400 / $8,000 = 32.5%

With a DTI of 32.5%, you’re in the clear to apply for a HELOC.

Application Process for a HELOC in Delaware

The application process for obtaining a home equity line of credit (HELOC) in Delaware involves several steps, including a thorough evaluation of your financial situation and the compilation of all necessary documentation. Let’s take a closer look at each step:

Step 1. Run the Numbers

Check your credit scores, calculate your DTI, and get a good estimate of your home equity before you apply for a HELOC. (If you’ve been following our recommendations thus far, you may already be ahead on this step.) Some lenders offer online prequalification, simplifying the process.

Step 2. Compare Lenders

See what offers you might qualify for from multiple lenders. But don’t just compare interest rates. Also check out qualification requirements, credit line minimums and maximums, fees, the length of the draw and repayment periods they’re offering, and other factors.

Step 3: Gather Your Documents

HELOC applications require that you back up your numbers with the proper documentation. This typically includes proof of income (W-2s, pay stubs), a detailed account of your employment history, and homeownership status (mortgage statements, proof of insurance). By having these documents readily available, you can significantly expedite the process.

Step 4: Submit Your Application

Submitting your HELOC application can take place online, by phone, or in person. Choose the method that works best for you—whether you prefer the convenience of online applications, the personal touch of a phone call, or the face-to-face interaction of an in-person meeting.

Step 5: Get an Appraisal

An appraisal is an integral part of the HELOC process. This might be an in-person appraisal, or a lender may use an automated valuation model (AVM), where a home’s estimated value is computed based on available data.

Step 6: Prepare for Closing

Before accessing your HELOC funds, you must sign loan documents and pay necessary fees. Certain lenders make funds available within three business days following the closing of the HELOC. Ensure you fully comprehend all terms and conditions before finalizing the loan agreement.

Tax Benefits and Considerations

Homeowners may be able to deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Interest deductions are limited to the first $375,000 of the principal for individual taxpayers ($750,000 for married couples filing jointly). Consult a tax advisor to navigate the specific tax implications and confirm eligibility for deductions.

Closing Costs and Fees

HELOC closing costs are lower than home-buying or cash-out refinance costs. The appraisal fee ($150-$500) is usually the highest expense. Other costs may include application, origination, and administrative fees. An annual maintenance fee may apply. Some lenders charge transaction, inactivity, or early termination fees.

Alternatives to HELOCs

Even if you have your heart set on a HELOC, it’s important to understand what is a home equity loan (and vice versa). How else will you know that you’ve chosen the best option for your needs and financial profile?

Other financing options include home equity loans, mortgage refinance, and personal loans. Each one has its advantages and considerations.

Home Equity Loan

Home equity loans provide a lump sum amount and are paid back at a fixed interest rate, so your monthly payment always stays the same. Borrowers can usually access up to 85% of the equity built in their home through a home equity loan. This option is most suitable for those who need a specific amount of money for a one-time expense. Here’s a HELOC vs home equity loan chart for you visual learners:

Cash-Out Refinance

A cash-out refinance lets homeowners refinance their existing mortgage for more than they owe and take the difference in cash. If you’re considering a cash-out refinance vs. a home equity line of credit, there are two things to keep in mind. A cash-out refi will leave you with one monthly payment (a new mortgage) versus the two you’d have when choosing to carry both a mortgage and a HELOC or home equity loan. It means, too, that you’ll have a new interest rate. If your current home loan provides a favorable rate, look closely at how much more you’ll end up paying in interest if you go with a refi.

Personal Loan

A personal loan is a flexible, typically unsecured loan that you pay back in regular payments over a term of 2-7 years. Personal loans do not require collateral, which is handy if you don’t have much home equity built up yet. However, the lack of collateral also means you’ll pay a significantly higher interest rate than you would on a HELOC or home equity loan.

Credit Cards

Credit cards come with much higher interest rates than HELOCs, which means you don’t want to carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, HELOCs are better suited for larger expenses.

The Takeaway

Delaware homeowners have many options for leveraging their home equity to borrow money. A HELOC is a good choice if you need funds for a large project (home renovation, college education) but will be paying multiple bills over a longer period of time. By maintaining a robust credit score, paying down credit card debt, and comparing loan offers from various lenders, you can secure the best available HELOC interest rates — and potentially save thousands of dollars.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What is the monthly payment on a $50,000 HELOC?

To determine the monthly payment on a $50,000 HELOC, you can use a HELOC monthly payment calculator. Plug in the interest rate and repayment term, along with the maximum amount you plan to draw with the HELOC. For example, if you borrow the max on a $50,000 credit line at an interest rate of 7.50%, and your term is 20 years, your monthly payment would be $403.

Is a HELOC a smart move for you?

Whether a HELOC is a good idea depends on your financial situation. HELOCs offer flexibility and can be beneficial for homeowners with substantial equity and a strong credit history. However, it’s important to consider current interest rates and your ability to make the monthly payments after the draw period is over.

What is the monthly payment on a $100,000 HELOC?

The monthly payment on a $100,000 HELOC could be $700 to $850 depending on the interest rate and assuming you have a 20-year repayment term.

What are the benefits of a HELOC?

HELOCs provide several significant benefits: versatile access to funds, lower interest rates than other loan options, and potential tax advantages. A HELOC can be used for many different purposes, such as home renovations, consolidating debt, or paying for college.

Do you need an appraisal for a HELOC?

For HELOCs, an appraisal is often required to determine the current value of your home. This appraisal helps lenders assess the amount of equity you have and the maximum loan amount you qualify for. The process ensures that the HELOC is secured by an accurate valuation of your property.

What disqualifies you from getting a home equity loan?

Several factors can disqualify you from obtaining a home equity loan, including a low credit score, a high debt-to-income ratio, and insufficient home equity.

How difficult is it to get a HELOC?

The difficulty of obtaining a HELOC depends on your financial profile. Lenders consider factors such as credit score, home equity, and income. HELOCs are generally easier to qualify for if you have a strong credit history and more than 20% equity in your home.

Does HELOC affect credit score?

HELOCs can affect your credit score in several ways. Applying for a HELOC results in a hard inquiry, which can temporarily lower your score. Additionally, using a significant portion of your available credit can increase your credit utilization ratio, potentially impacting your score. However, making timely payments on your HELOC can positively influence your credit history over time.

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.

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.

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 .

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.

SOHL-Q424-018

Compare HELOC rates in Washington.

Introduction to HELOC Rates

If you’re considering how to get equity out of your home in Washington State and researching the best HELOC interest rates, you’ve come to the right place. Our goal is to help homeowners understand all the factors influencing interest rates and how to secure the best deal on a home equity line of credit. You’ll learn about the application process, how to use online tools to predict your monthly payments and total interest paid, and alternatives like home equity loans and cash-out refis.

But first, let us explain what is a home equity line of credit so you can make sure this is the right financing option for you.

What Is a HELOC?

A home equity line of credit, or HELOC, is a revolving credit line (similar to a credit card) based on your home equity. Interest rates are typically lower than for unsecured personal loans because your home serves as collateral. However, HELOC interest rates are usually variable, meaning they can rise or fall with the market.

One advantage of a HELOC is that you withdraw from it only what you need at a given time — and you pay interest only on what you withdraw. Homeowners can borrow up to 90% of their equity, which is determined by an appraisal.

A HELOC has two phases: the draw period and the repayment period.

The Draw Period

During the draw period of a home equity line of credit, typically lasting 10 years, you can access funds up to your credit limit, make payments to reduce your balance, and borrow again. Interest-only payments are usually required during this period, but principal payments may be optional. Using a HELOC interest-only calculator can help you predict your minimum monthly payment during the draw period.

The Repayment Period

The repayment period of a HELOC usually lasts 10 to 20 years, during which borrowing ends and the principal is repaid with interest. However, the variable interest rate fluctuates, making repayment somewhat unpredictable. You can use a HELOC repayment calculator to estimate your payments and plan accordingly.

Recommended: HELOC vs Home Equity Loan

Where Do HELOC Interest Rates Come From?

HELOC interest rates are linked to “the prime rate,” which in turn is influenced by Federal Reserve policy decisions. Having a loose understanding of how interest rates are set can help borrowers anticipate rate fluctuations and make well-informed decisions about the optimal time for a HELOC.

How Interest Rates Impact HELOC Affordability

Interest rates can significantly affect the affordability of a HELOC. When it’s time to repay a $60,000 HELOC, having an interest rate of 7.00% would mean a payment of $465. With an 8.00% rate, your payment jumps to $502. Even more important, over the entire term, the customer with the 8.00% rate would pay almost $9,000 more in interest. The more you borrow and the higher the interest rate, the larger these numbers get. This is why it pays to research the best HELOC rates in Washington.

HELOC Interest Rate Trends

Fluctuations in the prime interest rate can give you a sense of where HELOC rates are headed. So it’s helpful to have a sense of the average prime rate’s recent trends. Since 2018, the prime rate has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023. The chart and graphic below will show you how much the prime rate typically swings.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Broad economic trends can affect HELOC interest rates, but so can you, the borrower. Your home equity, credit score, income, and loan-to-value (CLTV) ratio significantly influence the HELOC rate you’re offered. By understanding how you factor into the equation, you can position yourself to secure the most competitive rates for your home equity line of credit — and potentially save a lot of money.

Home Equity

Having substantial equity in your home is important with HELOCs and all different types of home equity loans. Homeowners generally need a minimum of 15% equity in their property to qualify for a HELOC. The more equity you have, the better interest rate you may be offered.

Credit Score

Maintaining a credit score of 680 or higher is important when seeking to qualify for a HELOC. And lenders reserve better interest rates for credit scores exceeding 700. As with home equity, the higher the better: A higher credit score serves as a reliable indicator of reduced risk to the lender.

Stable Income

Lenders assess your overall income to determine your ability to honor your HELOC obligations. A steady income stream is indicative of a diminished risk of default. Documenting your income, via pay stubs and W-2s, is an important part of the application process.

Loan-to-Value Ratio

Most lenders require your combined loan-to-value ratio (mortgage balance + desired HELOC amount / appraised home value) to be 90% or less, although some will allow you to borrow 100% of your home’s value. The ratio is a key metric in determining your credit limit. If your home value is $700,000, your mortgage balance is $450,000, and your HELOC balance is $150,000, then your LTV ratio is 86%.

Variable vs Fixed Interest Rates

HELOCs are characterized by variable interest rates, which fluctuate over the course of the repayment term. Initially, variable interest rates are lower compared to typical fixed rates, but they can adjust up or down with prevailing market conditions. For some homeowners, the uncertainty of variable interest rates makes them lean toward a home equity loan, which typically has a fixed interest rate.

Tools & Calculators

SoFi provides a comprehensive suite of financial tools. These can assist you in estimating your payments and gaining a thorough understanding of the financial implications associated with your home equity line of credit. Below you’ll find a home equity loan calculator as well as two HELOC calculators mentioned above.

How to Qualify for a Competitive HELOC Rate

To qualify for a competitive home equity line of credit rate in Washington, focus on improving your credit score, maintaining a steady income, and ensuring that your loan-to-value ratio remains low. These factors significantly influence the interest rates offered for your home equity line of credit. Let’s take a closer look:

Improve Your Credit Score

Maintaining timely payments and making an effort to reduce credit card balances can substantially build your credit score. Another thing you can do is check your credit report for errors. They do happen and fixing them can help your score recover. A higher credit score makes you a more desirable candidate for obtaining a HELOC.

Assess Your Home Equity

Regular mortgage payments help in building home equity over time. Home equity can be enhanced through renovations that boost the property’s value. You need at least 15% equity in your home for a HELOC. Take a few minutes to look up your home’s estimated value on a real estate web site. Subtract from that amount whatever you owe on your mortgage. Then divide the result by the estimated value. That’s your home equity percentage.

Calculate Your Debt-to-Income Ratio (DTI)

Your DTI ratio is how much you owe in monthly debt payments (car loan, student loans, etc) divided by your gross monthly income. Home equity lenders generally look for a DTI that’s below 36%, but the lower your DTI, the better.

Application Process for a HELOC in Washington

The application process for a HELOC in Washington State entails a series of well-defined steps. By gaining a thorough understanding of this process, you can navigate the application for your HELOC with ease and efficiency.

Step 1. Run the Numbers

Check your credit scores (above 700?), calculate your DTI (below 36%?), and get a good estimate of your home equity (above 15%?) before you apply for a HELOC. Some lenders allow borrowers to prequalify for a HELOC online, streamlining the application process.

Step 2. Compare Lenders

When you shop around, of course pay close attention to interest rates, but also compare their qualification requirements, draw minimums and maximums, fees, the length of the draw and repayment periods they’re offering, and other factors. It’s OK to prequalify with multiple lenders to nail down your top offers.

Step 3: Gather Your Documents

When applying for a HELOC, ensure that all the necessary documents are readily available. These typically include proof of income (pay stubs and W-2s), bank statements, employment history, and detailed property information, including proof of homeowners insurance. Having these organized and easily accessible will ensure a smooth and efficient application process for your HELOC application.

Step 4: Submit Your Application

Submitting your HELOC application takes place online, by phone, or in person. Be sure to attach all requested documents at this stage.

Step 5: Get an Appraisal

A home appraisal is an indispensable step in the HELOC process. If your home appraises for an amount that is higher than your mortgage balance, the lender may approve you for a HELOC loan.

Step 6: Prepare for Closing

Before accessing your HELOC funds, you must sign documents and pay necessary fees. Some lenders are quite prompt in making the funds available, with some even disbursing them within three days of the closing.

Tax Benefits and Considerations

Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. Interest deductions are limited to the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). Consult a tax advisor to navigate the specific tax implications and confirm eligibility for deductions related to a HELOC.

Closing Costs and Fees

HELOC closing costs are generally lower than home-buying or cash-out refinance costs. The appraisal fee is usually the highest expense, ranging from $150 to $500. Other costs may include application, origination, and administrative fees. Some lenders charge a maintenance fee, transaction fee, inactivity fee, or early termination fee. Many lenders offer to reduce or waive closing costs but may charge a higher interest rate.

Alternatives to HELOCs

Other financing options besides HELOCs include home equity loans, cash-out refinancing, and personal loans. Consider the pros and cons of each option to determine the best fit for your financial needs.

Home Equity Loan

Unlike HELOCs, home equity loans provide a lump sum amount and are paid back at a fixed interest rate, so your monthly payment never changes. Borrowers can usually access up to 85% of the equity built in their home through a home equity loan.

Cash-Out Refinance

A type of mortgage refinance, a cash-out refi lets homeowners pay off their existing mortgage plus take a lump sum of cash. This option may have higher interest rates than traditional refinancing.

If you’re considering a cash-out refinance vs. a home equity line of credit, you should know that the refinance means you’ll end up with only one monthly payment, as opposed to two if you take on a HELOC while paying off your mortgage. A cash-out refi also means a new interest rate and loan terms. If rates have risen since you initially financed your home, this may not be a good move.

Personal Loan

A personal loan is a flexible, typically unsecured loan that you pay back in regular payments over a term of 2 to 7 years. They can be used for almost anything and do not require collateral. They are a viable alternative to a home loan for those who prefer not to use their home as collateral. However, personal loan interest rates can be significantly higher than HELOCs.

Credit Cards

Because credit cards come with high interest rates, they’re better reserved for smaller purchases that can be paid off before the end of the billing cycle. HELOCs offer significantly lower interest rates than credit cards, making them suitable for larger expenses like home renovations or debt consolidation.

The Takeaway

When searching for the best HELOC rates in Washington State, it’s important to compare multiple lenders and consider factors like repayment terms, fees, and borrowing limits. HELOCs can be a valuable financial tool for homeowners looking to leverage their home equity for various purposes, from home improvements to debt consolidation. However, it’s important to understand the potential drawbacks of variable interest rates, and the consequences if you default.

SoFi now partners with Spring EQ to offer flexible HELOCs. Our HELOC options allow you to access up to 90% of your home’s value, or $500,000, at competitively lower rates. And the application process is quick and convenient.

FAQ

What is the monthly payment on a $50,000 HELOC?

The monthly payment on a $50,000 HELOC varies based on the interest rate and repayment terms. Assuming you draw the full amount and make interest-only payments during the draw period, your monthly payment over 10 years could range from $581 (at 7.00% interest) to $661 (at 10.00%). A repayment term of 20 years will mean lower monthly payments but significantly more interest paid over the life of the loan.

Is a HELOC a good idea right now?

Whether a HELOC is a good idea right now depends on your financial situation and goals. HELOCs can be beneficial for homeowners looking to fund home improvements, consolidate debt, or cover other large expenses. However, it’s important to consider the current interest rates and your ability to repay the loan.

What is the monthly payment on a $100,000 HELOC?

The monthly payment on a $100,000 HELOC is based on how much of the credit line you have used, and on your repayment term and interest rate. If you use the entire $100,000 and pay it back at 8.50% interest over 20 years, your monthly payment would be $868. If you had a 7.00% interest rate, you would pay less: $806.

What are the benefits of a HELOC?

The benefits of a HELOC include financial flexibility, lower interest rates compared to credit cards, and potential tax advantages. HELOCs allow you to borrow and repay as needed during the draw period, making them ideal for ongoing projects or unexpected expenses. Additionally, a HELOC can be used for various purposes, from home improvements to debt consolidation.

Do you need an appraisal for a HELOC?

An appraisal is typically required for a HELOC. The appraisal determines the value of your home, which directly influences the maximum amount you can borrow.

What disqualifies you from getting a home equity loan?

Several factors can disqualify you from getting a home equity loan, including poor credit history, high debt-to-income ratio (above 50%), and insufficient home equity (under 15%).

How difficult is it to get a HELOC?

The difficulty of getting a HELOC depends on your financial situation and the lender’s requirements. HELOCs typically require good credit, sufficient home equity, and a stable income. The application process involves submitting documentation, undergoing a home appraisal, and waiting for approval. A HELOC can be a valuable financial tool, but you’ll need to meet the qualification criteria to secure one.

Does HELOC affect credit score?

Yes, a HELOC can affect your credit score. Applying for a HELOC will result in a hard inquiry on your credit report, which can temporarily lower your score. Additionally, using a large portion of your available credit can increase your credit utilization ratio, potentially impacting your score. However, making timely payments on your home equity line of credit can help improve your credit score over time.

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.

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.

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 .

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.

SOHL-Q424-057