Compare HELOC rates in New Mexico.

Introduction to HELOC Rates

If you’re wondering about interest rates for a home equity line of credit (HELOC) in New Mexico, this guide can help you understand the current landscape and how to secure the best available deal.

We’ll discuss what is a home equity line of credit, where posted interest rates come from, and the factors influencing those rates. We’ll also cover the application process and alternatives for leveraging home equity to give you an understanding of how to navigate the market.

What Is a HELOC?

A HELOC is a revolving line of credit, similar to a credit card, that lets you leverage and borrow up to 90% of the equity you’ve built up in your primary residence. A HELOC has two phases: the draw period and the repayment period.

The Draw Period

During a HELOC’s draw period, typically lasting 10 years, you can access funds up to your credit limit. Interest payments will likely be required during this period, but principal payments may be optional. You can choose to make payments to reduce your balance, and then you may borrow again.

The Repayment Period

The repayment period of a HELOC is usually 10 to 20 years, and follows the draw period. During this phase after borrowing has ended, you must pay back the principal with interest. You will only pay interest on the amount you’ve borrowed, not the entire credit limit. Variable interest rates can fluctuate, however, making repayment unpredictable. A HELOC monthly payment calculator can help you to figure out what you might pay each month.

Recommended: Different Types of Home Equity Loans

Where Do HELOC Interest Rates Come From?

Interest rates for HELOCs are tied to the prime rate. This is the benchmark interest rate banks charge their most creditworthy customers. Policy decisions by the Federal Reserve also influence HELOC rates. Understanding these factors can help a borrower anticipate rate fluctuations and make informed decisions about the best time to apply for a HELOC.

How Interest Rates Impact HELOC Affordability

Interest rates have a significant impact on the cost of enjoying credit via a HELOC. The difference in total interest you’ll pay on a $100,000 HELOC at 6.00% and 7.00% amounts to about $14,000 over a 20-year term. A HELOC interest-only calculator can help you determine how much total interest you might end up paying. This chart also includes some examples:

HELOC Interest Rate Trends

Past fluctuations in the prime rate can provide insight into the potential trajectory of New Mexico HELOC rates. Staying informed about current HELOC rates will give you power to make well-timed decisions if you plan to borrow against your home equity.

Historical Prime Interest Rate

Since 2018, the prime rate has fluctuated considerably. It has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023. Historical trends can offer valuable insights into the potential future of HELOC rates in New Mexico.

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

The prime rate is important, but it isn’t the only thing that influences HELOC interest rates in New Mexico. Factors that are specific to the individual borrower often come into play as well. Understanding these considerations may help you to attain the most favorable rates for your home equity line of credit.

Home Equity

Having an impressive level of equity in your residential property makes you a safer prospect for lenders. As a borrower, you’ll typically need a minimum of 15% equity to qualify for a HELOC. The amount of equity you hold can potentially help you secure a better interest rate.

Credit Score

To make sure you get a favorable interest rate for your HELOC, you’ll want to maintain a credit score of 680 or higher. Many lenders prefer a credit score of 700 and above.

Stable Income

Lenders take a close look at your income in order to evaluate your ability to repay the HELOC. The stability of your incoming cashflow is important.

Loan-to-Value Ratio

Lenders are likely to require your combined loan-to-value ratio (CLTV) to be 90% or less. You can use this equation to compute your CLTV: Add your existing mortgage balance to the amount you hope to access with a HELOC, then divide by the appraised value of your home. Here is an example:

A homeowner has a property valued at $500,000. They owe $300,000 on the mortgage and apply for a $120,000 HELOC.

   $300,000 + $120,000 = $420,000

   $420,000 / $500,000 = .84

   The homeowner’s CLTV is 84%.

Variable vs Fixed Interest Rates

As we’ve noted, HELOCs often have variable interest rates. That means they are subject to change over the life of the loan. Initially, variable interest rates tend to be lower than fixed rates, but they generally increase or decrease over the loan’s duration, depending on prevailing market conditions. Rate fluctuations are almost certain to impact your HELOC payments.

Tools & Calculators

Online calculators will be useful as you prepare to borrow against the equity in your home. These tools will help you get an idea of how much you may be able to borrow, and what your monthly payments could ultimately be. Try plugging in different interest rates to see how a variable-rate loan could affect your monthly bills down the road. These three widgets, including a HELOC repayment calculator, may all be helpful:

How to Qualify for a Competitive HELOC Rate

To secure a good HELOC interest rate in New Mexico, you will want to make sure that, among other things, your credit score looks stellar. Do these things before applying:

Take Care for Your Credit Score

Keep up with payments. Work on chipping away at credit card balances you’re carrying. You will not just tidy up your finances — you will be nurturing your credit score. Regularly review your credit reports, look for inaccuracies, and correct them. The higher your credit score, the more attractive a candidate you’ll be for a home equity line of credit.

Assess Your Home Equity

If you are planning to apply for a HELOC, go for the best terms possible. You can do this by making sure you have at least 15% equity, or more, in your home. You can build your equity by making timely mortgage payments and investing in home improvements. Equity grows as your property’s value increases.

Calculate Your Debt-to-Income Ratio (DTI)

You can find out your DTI ratio by using a simple formula: Take the sum of your total monthly debt payments (car loan, student loan, etc.) and divide that number by your gross monthly income. A DTI below 50% is acceptable to some lenders. Others require a DTI of 36% or less. As a rule, lower is better. This number is always a factor in determining your HELOC eligibility and the terms you might be offered.

Application Process for a HELOC in New Mexico

The application process for a home equity line of credit in New Mexico will involve a detailed review of your financial situation and a formal appraisal of your home, among other steps. Understanding each part of the process can help you navigate it smoothly.

Step 1. Run the Numbers

Confirm that your credit score is 680 or above, and that your DTI ratio is below 36%. Estimating your home equity will give you an idea of how much you can borrow. Some lenders offer online prequalification tools, which can help you hone in on short-term goals.

Step 2. Compare Lenders

When seeking the best HELOC rates in New Mexico, it’s helpful to compare interest rates, qualification requirements, credit line minimums and limits, fees, and the duration of draw and repayment periods from multiple lenders.

Step 3: Gather Your Documents

When you’re ready to prepare your HELOC application, start by gathering and organizing all the necessary documents. This typically includes proof of income (such as W2 forms and at least one tax return), and property documents including proof of insurance. If you’re self-employed, lenders may ask for a profit-and-loss statement and two years’ tax returns — it’s smart to have these items prepared in advance.

Step 4: Submit Your Application

You can likely submit your HELOC application online or in person, depending on the lender. Sometimes you can even apply by phone. Be sure to attach all of the necessary documents.

Step 5: Get an Appraisal

A home appraisal plays an essential role in determining your eligibility for a HELOC. If your home’s appraised value exceeds the outstanding balance of your mortgage, you may qualify. The lender will offer resources to guide you through the appraisal process.

Step 6: Prepare for Closing

Before you’ll be able to access funds via your home equity line of credit, you’ll need to complete the process by signing documents and paying any fees the lender requires. Some lenders may make funds available as quickly as three business days following the signing.

Tax Benefits and Considerations

Homeowners can deduct the interest paid on a HELOC if the funds are used for significant home improvements (hold onto your receipts!). The maximum amount of mortgage principal eligible for interest deductions is $375,000 for a single filer, and $750,000 for couples filing jointly. It’s a good idea to consult a tax advisor, who can help you understand your eligibility for HELOC-related deductions.

Closing Costs and Fees

Closing costs for a HELOC tend to be lower than those you’d typically pay when buying a home. The fees may include $300–600 for the home appraisal, and lesser amounts for the application, origination, and administrative charges. Annual maintenance, transaction, inactivity, and early termination fees may also apply. Some lenders offer reduced or waived closing costs but then charge a higher interest rate for your home equity line of credit.

Alternatives to HELOCs

Every option for how to get equity out of your home offers advantages and disadvantages, so it’s wise to think through your financial objectives and to consider the differences between a HELOC and home equity loans to choose the right option for you.

Home Equity Loan

What is a home equity loan? Unlike a HELOC, it offers a lump sum of money at a fixed interest rate. Homeowners can borrow up to 85% of their home’s equity with this type of loan. Interest rates are usually a bit higher than those for HELOCs.

Carefully consider the differences between a HELOC vs. a home equity loan:

Cash-Out Refinance

One option that is a little different from a typical mortgage refinance is cash-out refinancing. This offering allows homeowners to tap into their home equity by refinancing their existing mortgage for more than they currently owe. They can then use the extra cash for any purpose.

Understanding the differences between a cash-out refinance vs. a home equity line of credit can help homeowners make smart decisions about their financial options. A cash-out refinance will leave you with one monthly payment (a new mortgage) versus the two you’d have when choosing to carry a mortgage and a HELOC or home equity loan. But 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 would pay in interest if you were to go with a refi.

Personal Loan

Personal loans are typically unsecured, and are likely to have a higher interest rate than a HELOC or home equity loan. You repay this type of loan in regular payments over a period of 2–7 years. This loan option can be utilized for almost any purpose and, unlike a home loan, doesn’t require you to use your home as collateral.

Credit Card

Like personal loans, credit cards typically come with higher interest rates than HELOCs. That aspect can make them much more expensive, especially if you carry a large balance from month to month. Credit cards do offer flexibility for smaller purchases, but HELOCs can be more suitable for larger expenses, including home improvements.

The Takeaway

A home equity line of credit can be a valuable financial tool for a homeowner seeking to capitalize on the equity they have accumulated in their home. HELOCs typically provide competitive interest rates and flexible repayment options. Just remember, a HELOC’s variable interest rate means that monthly payments can increase unexpectedly, since the rate fluctuates with the market. But if you aren’t sure how much you need for a major project, a HELOC is a flexible option to consider.

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?

You can use a HELOC monthly payment calculator to determine the monthly payment on a $50,000 HELOC. Just plug in the interest rate and loan term, along with the amount you plan to draw. 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 good idea right now?

To determine if a home equity line of credit is a sound financial move, consider your specific circumstances. A HELOC is a flexible way to borrow, since you only take what you need at any given moment, up to your approved credit line. You won’t pay any interest on the portion of the credit line you aren’t using. But HELOCs do typically have variable interest rates.

If you prefer a steady monthly payment amount, a home equity loan might be more appealing. You can play with a home equity loan calculator to see how the two might compare.

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

The monthly payment on a $100,000 HELOC will depend on the interest rate and repayment term as discussed, along with how much of the credit line you are using. If you’ve drawn just $30,000 of your $100,000 limit, the payment might be a few hundred dollars. If you’ve cashed out the entire $100,000 credit line and are paying 8.00% interest over 20 years, the monthly payment would be $836.

What are the benefits of a HELOC?

A home equity line of credit is a flexible way to borrow. You withdraw only the amount of the credit line needed at any given time, and only pay interest on the amount you’ve borrowed. Because it is secured by your property, a HELOC typically has a lower interest rate than a personal loan or a credit card. You can use the funds you borrow for almost anything. For many homeowners, an open credit line is a financial security blanket in case unexpected costs, like big-ticket home repairs, come up.

Do you need an appraisal for a HELOC?

Yes. An appraisal is customarily a requirement for a home equity line of credit. Since it is a determination of value for your home, it will be a factor for the lender in deciding your eligibility to borrow, along with your maximum credit line.

What disqualifies you from getting a home equity loan?

A poor credit history, insufficient home equity, or a high debt-to-income ratio — any of these issues can knock you out of the running for a home equity loan.

How difficult is it to get a HELOC?

Assuming you have your financial ducks in a row and can easily gather the necessary documents (tax returns, pay stubs, etc), and that you meet all the lender’s qualifications, it shouldn’t be hard to get a HELOC. The entire process takes 1–2 months and will move even faster if you’re organized. Be efficient when deciding which lender you’d like to utilize, and be sure to swiftly arrange access for the appraiser if a home visit is required.

Does HELOC affect credit score?

It can, yes. Applying for a HELOC entails a hard inquiry, which can have a temporary impact on your credit score.Your score is also influenced by how you manage your debts, so making consistent, punctual payments is essential. Stay on schedule and you shouldn’t have anything to worry about.

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.

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-Q424-041

Compare HELOC rates in Virginia.

Introduction to HELOC Rates

A HELOC, or home equity line of credit, provides flexible access to funds for home renovations, debt consolidation, or significant expenses. The key to its affordability is the interest rate a borrower manages to secure. This article provides an overview of HELOCs in Virginia, explaining what is a home equity line of credit, how HELOC rates in Virginia are set, and what factors will influence the rate you’ll receive. As you’re thinking about how to get equity out of your home it helps to have strategies for how to present your HELOC application, and we’ve got that, too. But let’s start with the basics.

What Is a HELOC?

A home equity line of credit (HELOC) is a revolving line of credit. Using one is similar to using a credit card, but one that is secured by your home. A lender may allow you to borrow up to 90% of the home’s value, minus your mortgage balance. One advantage of a HELOC is that you only withdraw from it what you need at a given time — and you only pay interest on what you withdraw. HELOC interest rates are usually variable, meaning they can rise (or fall) with market conditions. HELOCs have two phases: the draw period and the repayment period.

The Draw Period

During the HELOC’s draw period (usually 10 years), you can access funds up to your credit limit, make payments to pay down your balance, and even borrow the money again. Interest payments are typically required during this period, while principal payments are often optional. A HELOC interest only calculator can help you see what monthly payments might look like during the draw period.

The Repayment Period

During the repayment period (typically 10 to 20 years), borrowing ends and the principal is paid back with interest. HELOCs offer lower interest rates than many other forms of borrowing because your home serves as collateral. But especially because your home is on the line, it’s important to think about how a variable interest rate might change your payment amounts over the course of a HELOC. Using a HELOC repayment calculator can provide valuable insights into what payments might be depending on different borrowing levels and interest rates.

Where Do HELOC Interest Rates Come From?

HELOC interest rates are tied to the prime rate, which is the benchmark interest rate that lenders set for very creditworthy customers. Prime rates are in turn influenced by Federal Reserve policy decisions. Understanding these factors can help borrowers keep tabs on Fed movements and rate fluctuations and make an informed decision about when to apply for a HELOC.

How Interest Rates Impact HELOC Affordability

Interest rates have a significant influence on the affordability of HELOCs, both the monthly payment and the lifetime interest paid. As you can see from the chart below — which shows different interest amounts based on rate, term, and amount borrowed — it pays to research the best HELOC rates in Virginia to ensure you are getting the most competitive offers available.

HELOC Interest Rate Trends

One way to gain perspective on whether you’re being offered a good rate is to understand the history of the average prime rate. Since 2018, the prime rate has fluctuated, reaching a low of 3.25% in 2020 and a high of 8.50% in 2023, as you can see in the chart below. The graphic shows the average prime rate over more than a half-century. As you think about the variable rate of a HELOC, it’s helpful to see what kind of swing in the prime rate has happened historically and how broad (or not) those changes have been over a decade or two.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Of course, if everyone was offered the prime rate, you could stop reading right now. But lenders adjust their rate offers based on a series of metrics that is distinctive to you. Get to know them so you can see if any might get your application red-flagged.

Home Equity

As you’ve been making monthly payments on your home loan, you’ve built up equity in your property. You’ll need at least 15% to 20% equity to qualify for a HELOC, and the more substantial your ownership stake, the better rate you may get.

Credit Score

A credit score of 680 or higher is a good place to be when applying for a HELOC, but higher is better. Some lenders prefer a score of 700 or more.

Stable Income

Lenders assess your income to determine your ability to repay the HELOC. A stable income signals to them a lower risk of default, potentially leading to better HELOC rates. An erratic income isn’t a deal-breaker, but you might find that you have to take extra steps during the application process to show your earnings, such as providing more than one year of tax return information.

Loan-to-Value Ratio

Lenders usually require a combined loan-to-value ratio of 90% or less. For example, if your home is worth $500,000 and you have a $300,000 mortgage and want a $100,000 HELOC, your LTV ratio would be 80%, safely within the margin.

Variable vs Fixed Interest Rates

As we’ve seen, HELOCs feature variable interest rates, which will fluctuate during the loan term. Variable interest rates usually start out lower than fixed rates but adjust up and down with market conditions. A HELOC calculator can help you see what might happen if your entry HELOC rate adjusted up by, say, a half a percentage point or more.

Tools & Calculators

Calculators can not only assist you in estimating monthly payments, but can show you the total interest you might pay over the life of a HELOC or home equity loan. Here are a few we recommend:

How to Qualify for a Competitive HELOC Rate

To qualify for a competitive home equity line of credit rate, it is prudent to concentrate on enhancing your credit score, maintaining a consistent income stream, and ensuring that your loan-to-value ratio remains low. These factors are evaluated by lenders when determining the interest rate offered.

Care for Your Credit Score

Pay on time and avoid maxing out all your credit cards — it’s good credit hygiene for life. Another thing you’ll want to do is check your credit report for errors. They do happen and fixing them can help your score recover.

Assess Your Home Equity

You know you need at least 15% equity in your home for a HELOC. Maybe you have enhanced your home value through renovations. Or perhaps you live in a hot real estate market. 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 divided by your gross monthly income. Home equity lenders generally look for a DTI that’s below 50%, although some like 36% or less. Generally, the lower the better.

Application Process for a HELOC in Virginia

The steps involved in the application process for a HELOC in Virginia include reviewing your financial health, comparing rates, preparing documentation, submitting an application, undergoing a home appraisal, and waiting for approval and closing. Each step is crucial for securing a HELOC.

Step 1. Run the Numbers

Some lenders enable prospective borrowers to prequalify for a home equity line of credit online, thereby streamlining the application process. These lenders will calculate your DTI ratio and equity. If you don’t prequalify online, you’ll need to do the math by hand. First make sure you have at least 15% equity. Then ensure a DTI ratio of at least 50%. If you tick both boxes, it’s time for Step 2.

Step 2. Compare Lenders

When seeking the best HELOC rates in Virginia, it’s essential to compare various lenders. Don’t just look at posted interest rates. Consider factors such as qualification requirements, loan minimums and maximums, the length of draw and repayment periods, and fees.

Step 3: Gather Your Documents

To ensure a smooth and efficient HELOC application process, it’s important that you gather all the necessary documentation, including proof of income, a detailed employment history, and details about your property’s insurance coverage. Having these documents readily available will expedite the completion of your HELOC application.

Step 4: Submit Your Application

Submitting your HELOC application online or in person (or sometimes even by phone) is the next step. A complete and accurate application will better your chances of approval and helps you secure competitive HELOC rates in Virginia.

Step 5: Get an Appraisal

After you submit your application, you will probably need a home appraisal. This might be an in-person appraisal, or a lender may use an automated valuation model (AVM) appraisal, where an algorithm uses data to decide a home’s estimated value. The appraisal helps determine the amount of equity you have in your home, which affects your HELOC rate.

Step 6: Prepare for Closing

Once you find a HELOC offer at an acceptable interest rate and with terms you consider favorable, you’re ready to sign the loan agreement. Before accessing your HELOC funds, you’ll also pay necessary fees. Lenders can make funds available as quickly as three days after the closing. Ensuring all paperwork is in order and fees are paid will help you access your funds promptly.

Tax Benefits and Considerations

Homeowners can deduct HELOC interest if the funds are used for buying, building, or significantly improving their primary residence. Deductions are limited to interest paid on the first $375,000 of the mortgage principal for individual taxpayers ($750,000 for married couples filing jointly). Consult a tax advisor to navigate specific tax implications and confirm eligibility. And save your receipts for home improvements.

Closing Costs and Fees

HELOC closing costs are lower than home buying or cash-out refinance. The appraisal fee is usually the highest expense, ranging from $300 to $600. Other costs include application, loan origination, and administrative fees. Some lenders offer to reduce or waive closing costs but they may charge a higher interest rate.

Alternatives to HELOCs

In addition to HELOCs, there are different types of home equity loans and other financing options available. Consider this list before you sign on to any type of borrowing.

Home Equity Loan

Home equity loans and HELOCs are often confused. So it’s helpful to see what is a home equity loan and how it’s different from a HELOC. Unlike home equity lines of credit, home equity loans provide a lump sum and have a fixed interest rate. Homeowners can typically access up to 85% of the equity built in their home through a home equity loan. A home equity loan calculator can help you see how much you might be able to borrow. Here’s a quick look at the HELOC vs. home equity loan comparison:

Cash-Out Refinance

A cash-out refinance is a mortgage refinance that allows homeowners to refinance their existing mortgage for more than they owe, paying off their initial loan and taking the balance in cash. It’s useful for those who need a large lump sum.

A few things to think about if you’re considering a cash-out refinance vs. a home equity line of credit: The refinance means you’ll have only one monthly payment, as opposed to two if you take on a HELOC while paying off a mortgage. It also means a new interest rate and loan terms. If rates have dropped since you initially financed your home, this could be good news. Look closely at current interest rates in Virginia to make sure you aren’t paying significantly more interest by refinancing.

Personal Loan

Personal loans can be used to cover a wide range of expenses, just like HELOCs and home equity loans. However the repayment term tends to be shorter — 2 to 7 years. Interest rates for personal loans are also often higher than those for HELOCs or home equity loans because personal loans are unsecured. Some borrowers like the fact that their home wouldn’t be used as collateral. And because you sidestep a home appraisal, the loan approval process may be faster, too.

Credit Cards

Credit cards tend to come with higher interest rates than HELOCs, which can make them much more expensive if you carry a big balance from month to month. When considering borrowing strategies, it’s worth noting that a home equity loan or HELOC can offer a better rate and more flexible repayment terms than a credit card.

The Takeaway

HELOCs present Virginia homeowners with a highly flexible method to effectively leverage their home equity for a wide range of financial needs. Given the availability of competitive rates and a diverse selection of lenders, homeowners can conveniently secure substantial loan amounts for various purposes. Carefully tending your credit score, fully documenting your application, and comparing lenders’ rates can help ensure you get the best available HELOC rate in the state.

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 home equity line of credit (HELOC) is contingent upon the interest rate and repayment conditions — and of course, whether you are using the entire credit line. The best way to get the precise monthly payment is to plug your numbers into an online HELOC payment calculator.

Is a HELOC a good idea right now?

Deciding if a home equity line of credit (HELOC) is a sound financial move will depend on your financial circumstances. A HELOC is a very flexible way to borrow because you only borrow (and pay interest on) what you need. Do you need to borrow in increments, and are you comfortable with the HELOC’s variable interest rate? If so, a HELOC may be a good move for you.

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

The monthly payment on a $100,000 HELOC will be based on how much of the credit line you have used, and on your term and rate. If you use the entire $100,000 and need to pay it back at 7.50% interest over 20 years, your monthly payment would be $806. If you had a 7.00% interest rate, you would pay less: $775.

What are the benefits of a HELOC?

A home equity line of credit is a very flexible way to borrow. You only withdraw what you need at any given time. HELOCs also typically have a lower interest rate than a personal loan or credit card. You can use the funds borrowed from a HELOC for anything. And many borrowers find it reassuring to have a credit line open for any unexpected emergencies.

Do you need an appraisal for a HELOC?

Yes, an appraisal is usually a must for a HELOC. The value of your home helps the lender decide how much money you can borrow — and whether you can borrow at all.

What disqualifies you from getting a home equity loan?

Poor credit history, insufficient home equity, and a high debt-to-income ratio are some of the factors that can disqualify you from obtaining a home equity loan.

How difficult is it to get a HELOC?

The level of difficulty associated with getting a HELOC depends on your credit score, home equity, and debt-to-income ratio. Homeowners with strong financial profiles may find qualifying for a HELOC to be smooth sailing, whereas those with less favorable profiles may run up against challenges.

Does HELOC affect credit score?

Applying for a HELOC may result in a hard inquiry on your credit report, which can cause a temporary decrease in your score. How you manage your HELOC can also influence your credit score over the long term. If you’re the pay-on-time type, you should be fine.

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.

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-Q424-056

Compare HELOC rates in Montana.

Introduction to HELOC Rates

If you are looking to learn about home equity lines of credit (HELOC) and what the rates are in Montana, chances are you’ve been making timely home loan payments and building up valuable home equity. Congratulations.

Before you begin an application, use this guide to learn about the underlying factors that influence HELOC rates. It will help you choose the best offer for your personal financial needs.

You’ll find out what drives rates in Montana and come away knowing how to put your best foot forward with a prospective lender. We’ll take you step by step through the application requirements. And because a HELOC is just one way to get equity out of your home, we’ll explain alternatives to HELOCs as well.

What Is a HELOC?

A HELOC is a revolving line of credit using your home as collateral. The credit line you qualify for will depend on your home’s value and the remaining balance on your mortgage. Qualified borrowers may be able to pull out as much as 90% of their equity with a HELOC. You can draw, repay, and draw again with this flexible type of credit line.

HELOCs have two phases: draw and repayment. It’s important to understand them both.

The Draw Period

During a HELOC’s draw period, usually 10 years long, you have access to funds up to your credit limit. Payments in this period tend to be interest-only, with principal payments optional. If you pay down the principal, you can borrow against the full credit line more than once. A HELOC interest only calculator can help you manage your finances during the draw phase.

The Repayment Period

The repayment period of a HELOC may last 10 to 20 years. During that time, your borrowing ends and you pay back the principal with interest. Your interest rate is usually variable, and that can make monthly repayment amounts unpredictable. A HELOC repayment calculator can help you figure out what your monthly payments would be at various interest rates.

Where Do HELOC Interest Rates Come From?

Variable HELOC interest rates change over the life of the credit line, and are related to the prime rate — the rate banks and other lenders charge customers they think carry the least risk of default. Lenders look to Federal Reserve rates when setting their prime rates.

How Interest Rates Impact HELOC Affordability

An interest rate can have a significant impact on a HELOC’s affordability. When it’s time to repay a $60,000 HELOC, having an interest rate of 6.00% over a 20-year term would make your monthly payment $430. A 7.00% interest rate would increase that payment to $465. Looking at the entire term, the customer with the 7.00% interest rate would pay an additional $8,477 overall.

The more you borrow and the higher your interest rate, the larger the numbers. This chart shows you more examples:

HELOC Interest Rate Trends

Interest rates for HELOCs closely follow the prime rate. Understanding and anticipating possible interest rate fluctuations can help a homeowner make sound decisions when applying for a HELOC.

Historical Prime Interest Rate

The prime rate has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023. Its fluctuations over the years have directly influenced HELOC rates in Montana.

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

In addition to the prime rate, HELOC rates in Montana are significantly influenced by a borrower’s level of home equity, credit score, income, and loan-to-value (LTV) ratio. When all of these factors are optimal, the homeowner’s chances of securing a favorable HELOC rate are high.

Home Equity

If you hold significant equity in your home, you can usually score an attractive interest rate for a home equity line of credit. Homeowners who possess a minimum of 15% equity generally qualify for a HELOC. The more equity you have, the less risk your lender assumes.

Credit Score

To secure the most advantageous interest rates on HELOCs, you will want to maintain a credit score of 680 or higher — ideally, 700 or above. A higher score indicates to lenders that you present a lower risk.

Stable Income

Lenders assess your ability to pay back a HELOC by looking at your income. A borrower with a steady stream of income is less likely to default. This means you will almost always get a better interest rate if you can provide documentation of consistent income when you apply.

Loan-to-Value Ratio

Many lenders require you to show a combined loan-to-value ratio (mortgage balance + desired HELOC amount / appraised home value) of 85% or less. If your home is worth $500,000 and your mortgage balance is $300,000, for example, and your HELOC balance is $100,000, then your combined LTV ratio will be 80%.

Variable vs Fixed Interest Rates

A HELOC’s variable interest rate means that your rate changes throughout the life of the loan. Variable interest rates frequently start lower than fixed rates, then adjust upward or downward depending on conditions in the market. Understanding how variable rates work is key to managing a HELOC throughout the two phases.

Tools & Calculators

Financial tools like a HELOC monthly payment calculator, a HELOC interest-only calculator, and a home equity loan calculator can be helpful resources. Widgets like these will help you estimate your payments and understand a home equity line of credit’s financial implications.

How to Qualify for a Competitive HELOC Rate

To secure the best HELOC rates in Montana, you’ll want to make sure you have stellar credit, among other things. Do these things before you apply:

Take Care of Your Credit Score

Keep up with your payments and chip away at your credit card balances. When you take care with these things, you’re not just tidying up your finances — you are nurturing your credit score. Regularly review your credit reports. Correct inaccuracies promptly. The higher your credit score, the more attractive a candidate you are for a home equity line of credit.

Assess Your Home Equity

If you are planning to apply for a HELOC, make sure you have 15%–20% equity in your home, or even more. Build equity by making timely mortgage payments every month, or by investing in improvements. As your home’s value increases, your equity will grow.

Calculate Your Debt-to-Income Ratio (DTI)

You can figure out your DTI ratio using a simple formula: your total monthly debt payments (car loan, student loan, etc.) divided by your gross monthly income. Some lenders will allow a DTI below 50%. Others require 36% or less. Lower is always better. This number is important in determining your eligibility for a HELOC, as well as the terms you might be offered.

Application Process for a HELOC in Montana

The application for a home equity line of credit involves a multi-step process, including a financial evaluation, a formal application, and a home appraisal. Here’s a step-by-step.

Step 1. Run the Numbers

Before you jump in to apply for a home equity line of credit, size up your finances. Start by compiling your credit score info and DTI ratio. Some lenders invite you to prequalify for a HELOC online, and doing so can help you suss out whether your stats meet their requirements.

Step 2. Compare Lenders

Look at interest rates, along with lenders’ qualifications, credit limits, fees, and the duration of their draw and repayment periods. All these stats will give you a sense of which lenders might be a good fit for you.

Step 3: Gather Your Documents

Before you apply, gather the following: recent pay stubs, your latest tax return, a recent mortgage statement, and bank statements. Self-employed applicants should be ready with at least two years of tax returns. Having these documents prepared will ease the process.

Step 4: Submit Your Application

Once your ducks are in a row, you’re ready to submit the application. You can do this online, over the phone, or in person, depending on the lender. Double-check everything before you hit “send” or “submit” to avoid any issues going forward.

Step 5: Get an Appraisal

Your home’s appraisal is key to the HELOC process, since its market value is a determinant of how much equity you have, and that influences how much credit a lender might offer you.

Step 6: Prepare for Closing

Before you can draw on your credit line, you’ll need to sign paperwork and take care of any fees charged by the lender. Lenders often make funds available quickly — sometimes around three business days after you sign.

Tax Benefits and Considerations

If you decide to use HELOC funds to buy, build, or improve your home, you could deduct the interest you pay on the first $375,000 borrowed if you file taxes as an individual ($750,000 if you are married and filing jointly). Consulting with a tax advisor for specifics is smart and will help you make the most of deductions related to your home equity line of credit.

How Much Does a HELOC Cost?

HELOC closing costs are lower than those for buying a home or a mortgage refinance. The appraisal fee, which may range from $300 to $600, is typically the most significant line item. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Be aware that reduced or waived closing costs may come with a higher interest rate.

Alternatives to HELOCs

Other ways to get equity out of your home are available, such as different types of home equity loans and cash-out refinancing. Personal loans are also an option if you prefer an unsecured loan. Consider the advantages and disadvantages when looking at each option to determine which best meets your requirements.

Home Equity Loan

When you compare a HELOC vs. home equity loan, you’ll find that the latter provides a fixed lump sum amount and is paid back at a fixed interest rate. Borrowers may be able to access up to 85% of their home equity through this option.

You can use a home equity loan calculator to estimate your borrowing capacity. Here’s a quick look at some differences between the two:

Recommended: What Is a Home Equity Loan?

Cash-Out Refinance

If you are debating between a cash-out refinance vs. a home equity line of credit, this might help: With cash-out refinancing, homeowners can refinance their mortgage for more than what’s owed. They then will receive the difference in cash. This option may suit you if you need a large lump sum.

Personal Loan

This option does not require collateral, making it viable for those without significant home equity. Personal loans will pay out anywhere from $1,000 to $100,000 and are paid back in regular, set payments over a term of 2–7 years. You can use a personal loan for home improvements, debt consolidation, and other large expenses.

Credit Cards

Credit cards and HELOCs are both revolving debt options. Instead of receiving a big chunk of money, you access a credit line that you can tap as needed. Credit cards, of course, come with higher interest rates than HELOCs, and that can make them more expensive if you carry a large balance month upon month. While cards may offer flexibility for smaller purchases, a home loan like a HELOC may be a more cost-effective solution for larger expenses like home improvements, or if you are consolidating debt.

The Takeaway

A home equity line of credit can be a valuable financial tool for homeowners seeking to capitalize on their home’s accumulated equity. HELOCs provide competitive interest rates and flexible options for repayment. Homeowners who aren’t sure how much they need for a major project may find a HELOC a worthwhile option to consider. Just keep in mind that a HELOC’s variable interest rate means monthly payments can increase unexpectedly if the market shifts.

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 home equity line of credit can vary, based on how much of the credit line you draw, the interest rate, and the repayment term. With an 8.00% interest rate and a 10-year term, your monthly payment will be about $607. This is assuming you will make interest-only payments through the draw period.

Is a HELOC a smart move for you?

To determine whether a home equity line of credit is a sound financial decision, you’ll need to consider your individual financial circumstances. While HELOCs can be advantageous for home improvements, debt consolidation, and other big expenses, it’s essential that you carefully consider the interest rates, repayment terms, and potential risks of assuming this type of credit.

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

The payments you’ll need to make on a $100,000 home equity line of credit (HELOC) can be easily calculated with a HELOC monthly payment calculator. The interest rate, the repayment term, and other details will influence the monthly payment. If you assume you’ll draw the full amount, secure a 7.00% interest rate, and repay over a 20-year term, your monthly payment will be about $836.

What are the benefits of a HELOC?

HELOCs offer homeowners flexible access to funds, competitive interest rates, and potential tax advantages. They can help fund home improvement projects, educational expenses, and debt consolidation.

Do you need an appraisal for a HELOC?

Yes. An appraisal is generally required for HELOC applications, as they help a lender to ascertain the property’s current market value. With the appraisal, lenders can evaluate the amount of available equity and set the borrowing limit.

What might prevent you from getting a home equity loan?

Several factors, including a poor credit history, insufficient home equity, or a high debt-to-income ratio, may disqualify you from receiving a home equity loan. Familiarize yourself with various home equity loan requirements to enhance your chances of meeting the criteria for a loan.

How hard is it to get a HELOC?

How hard it is to secure a HELOC may be contingent on several factors, including your credit score, your amount of home equity, and your income stability.

Does HELOC affect credit score?

When you apply for a home equity line of credit, it may temporarily cause a slight decrease in your credit score because of the hard inquiry. But when you make consistent and punctual payments on your HELOC, it can have a positive impact on your credit score over time by demonstrating your responsible borrowing behavior and positive credit history.

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.

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-Q424-036

Compare HELOC rates in Oregon.

Introduction to HELOC Rates

If you’re thinking about how to get equity out of your home in Oregon, this comprehensive article will ensure you have a solid grounding in the best home equity line of credit interest rates in Oregon and how to obtain them. You’ll gain valuable insights into the various factors that influence rates, plus advice on how to apply for a HELOC as well as different types of home equity loans and other ways to borrow.

First it’s important to make sure we cover the basics, starting with what is a home equity line of credit.

What Is a HELOC?

A HELOC is a revolving line of credit similar to a credit card. The amount you can borrow is based on your home equity, which is the difference between your home’s current value and your home loan balance. You don’t have to borrow the entire amount of the credit line at one time; you can borrow as you need to, and you’ll only pay interest on the amount of the credit line that you actually use. Lenders may allow you to borrow up to 90% of your home’s value, minus your mortgage.

HELOC interest rates are often variable, and so the cost of a HELOC can go up or down each month based on the amount of the credit line that you are using and your variable rate. But initial rates on a HELOC are typically lower than rates for personal loans or credit cards because your home is serving as collateral.

HELOCs have two main phases: the draw period and the repayment period.

The Draw Period

During the HELOC’s draw period (usually 10 years), you can access funds up to your credit limit, make payments to pay down your balance, and borrow the money again. The borrower is usually required to make interest payments during the draw period, but payments toward the principal may be optional. Borrowers can use a HELOC monthly payment calculator to estimate payments.

The Repayment Period

During the repayment period (10 to 20 years), borrowing ends and the principal is paid back with interest. A HELOC repayment calculator can help borrowers plan their payments.

Where Do HELOC Interest Rates Come From?

HELOC interest rates are tied to the prime rate and can be influenced by broad economic factors. The prime rate is the benchmark interest rate that banks charge their most creditworthy customers. Federal Reserve policy decisions regarding interest rates can also influence lenders as they set their rates. The best Oregon HELOC rates can vary, so it’s important to compare offers from different lenders during the application process.

How Interest Rates Impact HELOC Affordability

The interest rate you obtain for your HELOC can make a big difference in the affordability of a loan over the course of a 10-year draw and a 20-year repayment term. Even a 1% difference in interest rate can result in thousands — or even tens of thousands — of additional interest over the life of the loan. Here’s an example of a $50,000 HELOC repaid over 20 years at three 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

As you begin the process of searching for the best HELOC rates in Oregon, it’s helpful to understand how the average prime rate has fluctuated in recent years, as well as over the decades. It will help keep your rate expectations realistic.

Since 2018, the prime rate has undergone noteworthy fluctuations, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023, as you can see from the chart below. The graphic below shows a longer time period. As you can see, rates that are below 4.00% or above 10.00% are somewhat uncommon.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

The prime rate isn’t the only factor influencing the HELOC rate you’ll be offered. Your level of home equity, your credit score, and other information specific to you will guide the lender’s decision, and different lenders weigh factors differently — that’s why it’s important to do your homework when searching for the best HELOC rates in Oregon. Let’s look at these data points:

Home Equity

Having a significant amount of equity in your home makes you appear less risky to lenders, which can often lead to more favorable interest rates. Typically, homeowners need at least 15% to 20% equity in their property to qualify, and the more equity the better.

Credit Score

Maintaining a credit score of 680 or higher is crucial, and some lenders prefer a credit score of 700+. A higher credit score indicates lower risk, potentially leading to more favorable HELOC terms.

Stable Income

Lenders assess your overall income to determine your ability to repay the HELOC. But they are also looking at how consistent your income stream has been. If your income is erratic, a lender may ask you to provide extra documentation, such as additional tax returns, during your application process.

Loan-to-Value Ratio

Most lenders require your combined loan-to-value ratio (combined mortgage and credit line balance / appraised home value) to be 90% or less for a HELOC. The ratio is a key metric in determining your credit limit. If your mortgage balance is $300,000 and your desired HELOC is $100,000, and your home value is $500,000, then your LTV ratio is 80%.

Variable vs Fixed Interest Rates

HELOCs’ variable interest rates are subject to change during the life of the loan. Initially, variable interest rates are lower than typical fixed rates, but after a predetermined introductory period, which will be defined in the HELOC agreement, they fluctuate in accordance with market conditions. Home equity loans are another way to borrow money against your home equity. These loans are usually fixed rate.

Tools & Calculators

As you’re thinking about the costs of a HELOC, it’s helpful to use online calculators to assess how much you might be able to borrow and what monthly payments and total interest paid look like with different HELOC interest rates. Here are three useful tools:

How to Qualify for a Competitive HELOC Rate

Since lenders factor in your personal financial metrics when they decide what interest rate to offer you, it’s helpful to take a few steps before applying for a HELOC to ensure you present the best possible picture. Here’s a to-do list:

Take Care of Your Credit Score

As noted above, you’ll want to have a score of at least 680. Check your credit score and examine your credit report for any inaccuracies. Mistakes do happen, and fixing errors can help your score. You’ll also want to avoid using the full credit line available to you on any credit cards you have. And of course pay your bills on time.

Assess Your Home Equity

Regular mortgage payments have helped you build home equity over time. But how much equity? Look up your home on a real estate web site to find a rough estimate of its value. Subtract what you owe on your mortgage from your home’s estimated value, then divide the answer by your home’s estimated value to arrive at a percentage of equity. Ideally, it’s greater than 15% or, even better, 20%.

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%, though some prefer an even lower number. But the lower your DTI, the better.

Application Process for a HELOC in Oregon

Applying for a HELOC in Oregon will involve sharing lots of financial details, so you’ll want to have your documents in order before approaching the application process. Follow this guide.

Step 1. Run the Numbers

Before applying for a HELOC, make sure your financial factors will work in your favor. Is your credit score at 680 or above? Are your monthly debts no more than a third of your gross monthly income? Finally, estimate your home equity to see that it’s at least 15%. Some lenders allow you to prequalify online.

Step 2. Compare Lenders

When searching for the best HELOC rates in Oregon, compare offers from multiple lenders. Consider their interest rates. But also look at qualification requirements, loan limits, fees, and the length of draw and repayment periods. Try to spot the lenders that have the best scenario for your needs.

Step 3: Gather Your Documents

Make sure that you have all the documents you need for your HELOC application close at hand. These typically include proof of income, including recent pay stubs and your most recent W-2. Keep your employment history handy, along with home insurance documents, bank statements, and your most recent tax filing.

Step 4: Submit Your Application

Double-check all the information and be sure you’ve filled in every blank, because errors and omissions slow the application process. Then submit your application. This can generally be accomplished online, although some lenders work over the phone or in person.

Step 5: Get an Appraisal

A home appraisal is usually needed in the HELOC application process. The lender will let you know what is necessary. Schedule the visit promptly (if one is required) because delays will cause the application process to grind to a halt. The appraisal serves the purpose of determining the maximum amount you can borrow, which is based on your home’s value and the equity you have in it.

Step 6: Prepare for Closing

Wait for the HELOC approval. Then, before you can access the funds, you will need to sign documents and pay any required fees. Some lenders make funds available in as little as three days following the finalizing of the HELOC agreement.

Tax Benefits and Considerations

Homeowners can deduct HELOC interest if the borrowed funds are used for buying, building, or significantly improving their primary residence. The deduction is limited to interest on the first $375,000 of the principal for individual taxpayers ($750,000 for married couples who file jointly). A tax advisor can help you navigate the specific tax implications and confirm eligibility for this deduction.

Closing Costs and Fees

HELOC closing costs are lower than typical home-buying or refinancing costs. An appraisal fee of $300 to $500 is usually the highest expense. Other costs include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Understanding these costs can help you weigh the pros and cons of different HELOC offers.

Alternatives to HELOCs

There are other ways besides HELOCs to borrow money, of course. You might want to consider one or more of these options, so it pays to be familiar with them before you borrow.

Home Equity Loan

This borrowing option is often confused with a HELOC, so it’s important to understand what is a home equity loan and how it’s different from a HELOC. Unlike HELOCs, home equity loans provide a lump sum amount and are paid back at a fixed interest rate. Borrowers can usually access up to 85% of the equity built in their home through a home equity loan (as opposed to 90% with a HELOC).

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

Cash-Out Refinance

Homeowners can get cash by undertaking a mortgage refinance for more than they owe. This option offers a large lump sum. But if you have a low mortgage rate with your current home loan, it may not make sense — you’ll need to run the numbers to see how both your monthly payments and your total interest paid would change with a new loan. Another factor to consider in the cash-out refinance vs. home equity line of credit: A HELOC will leave you with a second payment each month. A cash-out refi means you’ll have one payment.

Personal Loan

A personal loan is a flexible, typically unsecured loan that you pay back in regular, fixed payments over a set term of 2 to 7 years. Personal loans can be used for various purposes, including home improvements, debt consolidation, and other expenses. It’s important to understand that a personal loan, because it is not secured by your home, may have a higher interest rate than a HELOC or home equity loan. Some borrowers are willing to pay that because they prefer not to use their home as collateral.

Credit Cards

Credit cards typically come with higher interest rates than HELOCs, which can make them much more expensive if you carry a large balance from month to month. While credit cards offer flexibility for smaller purchases, types of HELOCs or home equity loans may be better suited for larger expenses such as home improvements or debt consolidation.

The Takeaway

HELOCs available in the state of Oregon come with competitive interest rates and flexible repayment terms, making them an attractive option for homeowners seeking to leverage their home equity. By comparing Oregon HELOC rates offered by various lenders, you can secure the most advantageous deal that aligns with your specific financial requirements and objectives.

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?

With an 8.00% interest rate and a 10-year term, your monthly payment will be about $607. But how much you’ll pay will be based on your specific interest rate and loan term. If you had the same 8.00% interest rate but repaid what you borrowed with interest over a 20-year term, it would cost $418 per month, although you would pay more total interest with the 20-year term.

Is a HELOC a good idea right now?

Whether a HELOC is a smart move depends on your finances and goals. HELOCs can be useful for home improvements, debt consolidation, and other large expenses. However, it’s important to think through the interest rates, fees, and potential impact on your home equity before making a decision. (Owing money on a HELOC will eat into your equity until you have repaid what you borrow.)

What is 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. Repaying it at a 7.50% interest over 20 years would cost $806 a month. An interest rate of 8.00% and the same 20-year term means a payment of $836.

What are the benefits of a HELOC?

A HELOC is a flexible way to borrow. Rather than withdraw a lump-sum loan, you can borrow in increments as you need funds, and at a rate that is typically lower than you would get with a credit card. Best of all, you only pay interest on what you have actually borrowed.

Do you need an appraisal for a HELOC?

Yes, an appraisal is a crucial step in the process of obtaining a HELOC, as it helps to establish the value of your home, which in turn determines the amount you can borrow. Lenders want to make sure your loan is secured by adequate equity in your home. Your lender will provide details about the appraisal process.

What disqualifies you from getting a home equity loan?

There are a few 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?

Assuming you can meet lenders’ requirements of a healthy credit score and debt levels, and you have a minimum of 15% home equity, it shouldn’t be too challenging to get a HELOC. The hardest part for many would-be borrowers is compiling the financial documents needed for the application. But taking the time to do that with care will help move the application process along more quickly.

Does HELOC affect credit score?

When you apply for a HELOC, the lender will perform a hard inquiry on your credit report, which could cause a temporary dip in your credit score. Carrying a large balance on your HELOC could negatively impact your credit utilization ratio and lower your credit score. But making regular payments toward your HELOC will show you can use credit responsibly and that should reflect favorably on your score.

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.

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-Q424-047