Compare HELOC rates in South Dakota.

Introduction to HELOC Rates

This comprehensive guide provides a thorough overview of HELOCs, or home equity lines of credit, and their interest rates. If you’re a homeowner investigating how to get equity out of your home, you’re in luck. We’ll explain in plain language how HELOC rates are set, the HELOC application process, and effective strategies for securing competitive rates in South Dakota. Armed with this information, you can make well-informed decisions that align with your budget and aspirations.

First step: Wrap your head around what is a home equity line of credit:

What Is a HELOC?

A HELOC is a revolving credit line based on your level of home equity. Equity is the difference between a home’s value and the mortgage owed. Borrowers may qualify for up to 90% of the home’s value, minus the mortgage.

HELOCs are secured by your home, so they generally offer lower interest rates than unsecured personal loans. And because they have a variable interest rate, the entry level rate on a HELOC is usually lower than the fixed rate you would get on a home equity loan. From there, though, the rate can rise or fall according to market conditions.

A HELOC has two phases: draw and repayment.

The Draw Period

During the draw period, which typically lasts 10 years, borrowers can access funds up to their credit limit. While monthly interest-only payments are generally required, principal payments may be optional. If you do pay down the principal, you can borrow that money again. Don’t need your full credit line after all? Then you don’t have to use it. And you pay interest only on the amount that you are using.

A HELOC interest-only calculator can show you your minimum payment for the draw period based on your HELOC amount and interest rate.

The Repayment Period

During the repayment period (usually 10 to 20 years), borrowing ends and the principal is repaid with interest. The variable interest rate will fluctuate, making repayment somewhat unpredictable. But a HELOC repayment calculator can help you plan ahead for rate changes.

Where Do HELOC Interest Rates Come From?

We’ll keep this simple: South Dakota HELOC interest rates are tied to something called the prime rate, which is the benchmark interest rate that banks give customers with a stellar credit history. HELOC rates are also influenced by economic conditions, the Federal Reserve’s policy decisions, and the housing market in your part of the state.

Having a loose understanding of where interest rates come from can help borrowers anticipate rate fluctuations and make informed decisions about the best time for a HELOC.

How Interest Rates Impact HELOC Affordability

Why the laser focus on interest rates? Rates have a significant impact on the affordability of any home loan. A 1% difference in interest rate may seem small — and it’s true your monthly payment may not change much. But over a 10-year draw period and 20-year repayment period, that 1% adds up. The table below shows how different interest rates and repayment terms affect the total interest you’ll pay. That 1% difference can mean thousands of dollars in additional interest.

HELOC Interest Rate Trends

Given that HELOC rates are tied to the prime interest rate, getting a sense of the history of the average prime rate (shown in the chart and graphic below) can help you understand where today’s HELOC rates in South Dakota fall on the spectrum. Since 2018, the prime rate has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Now that you’re well-versed in the economic factors that influence HELOC interest rates, get ready for a curveball. HELOC rates in South Dakota are also influenced by the borrower’s financial profile. That means you. Many of your past financial decisions are reflected in your credit score. Let’s take a look at what else lenders are interested in:

Home Equity

Substantial home equity makes borrowers appear less risky to lenders, often leading to more favorable interest rates. Typically, homeowners need to have at least 15% equity to qualify for a HELOC.

Credit Score

You need to maintain a credit score of 680 or higher to qualify for a HELOC, but a score of 700+ will get you better rates. A higher credit score indicates lower risk for the lender.

Stable Income

Lenders assess your overall income to determine your ability to repay the HELOC. A stable income indicates a lower risk of default. This is why documenting your income, via pay stubs and W-2s, is an important part of the application process.

Loan-to-Value Ratio

Lenders often require a combined loan-to-value (LTV) ratio of 90% or less, though some will allow you to borrow 100% of your home’s value. Your LTV ratio is a key factor in determining your credit limit. If your home value is $400,000, your mortgage balance is $225,000, and your HELOC balance is $100,000, then your combined LTV ratio is 81%. The formula is simple: mortgage balance + desired HELOC / home value.

Variable vs Fixed Interest Rates

HELOCs feature variable interest rates, which will fluctuate throughout the loan term. Variable interest rates start out lower than typical fixed rates but will adjust up and down with market conditions. Understanding the difference can help you plan your financial strategy.

Tools & Calculators

SoFi provides numerous online tools to assist you in estimating your payments and gaining insight into the financial implications of a HELOC. 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 obtain the most favorable HELOC rates in South Dakota, homeowners are advised to build their credit score and compare offers from multiple lenders. The goal is to get the lowest rate possible with your financial profile.

Care for Your Credit Score

Making timely payments and reducing credit card balances can significantly boost your credit score. The higher your score, the better the interest rates you’ll be offered. Regularly checking your credit report and addressing any issues can also help.

Assess Your Home Equity

The first step when you’re considering different types of home equity loans and lines of credit is to assess your equity stake. Just subtract your mortgage balance from your home’s value, then divide the result by the home value to get a percentage. For this purpose, you can use an online estimate of your home’s value, such as what you see on real estate sites.

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.

Application Process for a HELOC in South Dakota

The application process for a HELOC in South Dakota involves several steps, including reviewing your financial health, comparing rates, preparing documentation, submitting an application, and undergoing a home appraisal. Understanding each step can help you navigate the process smoothly, and maybe even save you some needless worry.

Step 1. Run the Numbers

Check your credit score, calculate your DTI, and get a good estimate of your home equity before you apply for a HELOC. If you’ve been following our advice so far, you already have your numbers. Ideally, they’re over 680, under 36%, and over 15%.

Step 2. Compare Lenders

Prequalifying with multiple lenders can give you a good idea of what interest rates you qualify for. But also compare qualification requirements, credit line minimums and maximums, fees and penalties, and the length of the draw and repayment periods.

Step 3: Gather Your Documents

When applying for a HELOC, it helps to gather all the necessary documents beforehand. This typically includes proof of income, employment history, and identification.

Step 4: Submit Your Application

Submitting your HELOC application can take place online, by phone, or in person. Remember, submitting an accurate and complete HELOC application will save time and hassle.

Step 5: Get an Appraisal

A home appraisal is an important step in determining the value of your property. If an in-person visit is required, scheduling it quickly will help move along the application process.

Step 6: Prepare for Closing

Before accessing your HELOC funds, you must sign loan documents and pay necessary fees. Some lenders make funds available within three days following this closing process.

Tax Benefits and Considerations

Homeowners can deduct HELOC interest on the federal tax return 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). Consulting a tax advisor might be a good idea the first year of your HELOC.

Closing Costs and Fees

HELOC closing costs are usually lower than home-buying or cash-out refinance costs. The appraisal fee, typically the highest expense, ranges from $150 to $500. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance fees and transaction fees. Inactivity and early termination fees may also apply.

Alternatives to HELOCs

In addition to HELOCs, other financing options that may be available to homeowners include home equity loans, cash-out refinancing, and personal loans. Carefully consider the terms and conditions of each option, and choose the one that best aligns with your financial goals and circumstances.

Home Equity Loan

Home equity loans offer a lump sum at a fixed interest rate. Borrowers can typically access up to 85% of their home’s accumulated equity through a home equity loan. Comparing a HELOC vs home equity loan can help you grasp their distinct features and advantages.

Cash-Out Refinance

A type of mortgage refinance, a cash-out refi lets homeowners tap home equity by refinancing their existing mortgage for more than what they owed and taking the difference in cash. Some borrowers lean toward the cash-out refi option because they like rolling everything into one monthly payment — as opposed to the two payments you have with a mortgage and a HELOC or home equity loan.

When comparing a cash-out refinance vs. a home equity line of credit, one thing to keep in mind is that with a new mortgage, you’ll also have a new interest rate. If current rates are higher than your existing rate, you’ll want to carefully tally the costs to make sure refinancing makes sense.

Personal Loan

A personal loan is a versatile, typically unsecured loan that you repay in regular monthly payments that stay the same over a term of two to seven years. Personal loans are preferred by borrowers who don’t want to use their home as collateral. But because they are unsecured, they usually have higher interest rates than home loans.

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, home equity loans and HELOCs are often more suitable for larger expenses such as home renovations or debt consolidation.

The Takeaway

When considering a home equity line of credit (HELOC) in South Dakota, it’s smart to do your research and compare multiple HELOC offers. By taking proactive steps such as building your credit score and paying down debt, you can significantly enhance your chances of securing highly competitive rates and favorable terms for your HELOC.

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?

Let’s assume you draw the full amount and make interest-only payments during the draw period. With an 8.00% interest rate and a 10-year term, your monthly payment will be about $607. An 8.00% interest rate over a 20-year term would cost $418 per month, but you’ll pay more interest in the long run. A HELOC calculator can show you how much you’d pay with different interest rates and repayment terms.

Is a HELOC a good idea right now?

A home equity line of credit, or HELOC, can be a practical solution when seeking funds for large renovation projects or debt consolidation. However, obtaining the lowest available HELOC interest rate makes a big difference in the overall affordability.

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

The monthly payment on a $100,000 home equity line of credit is determined by the interest rate and repayment term. If you draw the full amount, have an 8.50% interest rate, and repay what you borrowed (plus interest) over a 20-year term, your monthly payment should be about $868.

What are the benefits of a HELOC?

HELOCs provide flexible access to funds, competitive interest rates, and the potential for tax benefits. These credit lines are ideally suited for homeowners seeking to finance substantial expenses ($25,000+), enabling them to tap into the home equity accumulated in their properties.

Do you need an appraisal for a HELOC?

Indeed, it is standard practice for a home equity line of credit (HELOC) to necessitate an appraisal, the purpose of which is to ascertain the current market value of your property. Some lenders may offer options that do not require an in-person appraisal, but they’ll need to determine your home value and equity position one way or another.

What disqualifies you from getting a home equity loan?

Factors that could potentially disqualify you from securing a home equity loan include a history of poor credit, insufficient home equity, and a high debt-to-income ratio.

How difficult is it to get a HELOC?

The level of difficulty in obtaining a home equity line of credit hinges upon your financial circumstances. Key factors that lenders consider include a history of good credit, sufficient home equity, and a consistent source of income. If you have your ducks in a row and don’t mind the somewhat lengthy application process, you won’t find it difficult to get a HELOC.

Does HELOC affect credit score?

A HELOC may impact your credit score either positively or negatively. Applying for one can cause a temporary dip due to a hard inquiry. High credit utilization from using a large portion of your available credit line can also ding your score. On the other hand, making timely payments can build a 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.

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-Q424-051

Compare HELOC rates in Minnesota.

Introduction to HELOC Rates

If you’re wondering how to get equity out of your home and considering a home equity line of credit (HELOC), this guide will make your application process easier and help you get a competitive interest rate. You’ll learn the key factors influencing Minnesota HELOC rates and how to effectively utilize this information to make an informed decision. Let’s start with the basics:

What Is a HELOC?

A home equity line of credit enables homeowners to borrow against equity they’ve built in their home. You can borrow up to 90% of your home’s value, minus what you still have to pay on your mortgage. Because a HELOC works somewhat like a credit card, you don’t have to borrow the entire amount at once. You can draw money as you need it. The HELOC is secured by your home, so it may have a better interest rate than a credit card or a personal loan.

HELOCs have two phases: first the draw period, followed by the repayment period. It’s important to understand them and their differences.

The Draw Period

During a HELOC’s draw period (10 years is standard), you can access funds up to your credit limit, make payments on your balance, and borrow the money again if you want to. As a borrower, you’ll usually be required to make interest payments in the draw period, but paying back the principal may be optional.

The Repayment Period

During the 10- to 20-year period of repayment, borrowers pay off the principal with interest. Experiment with a HELOC repayment calculator for help understanding your monthly payments and overall interest.

Where Do HELOC Interest Rates Come From?

Interest rates on HELOCs are variable, meaning they change over the life of the credit line. They’re influenced by the prime rate, which is the rate banks and other lenders charge borrowers they perceive to be at the lowest risk of default.

How Interest Rates Impact HELOC Affordability

Interest rates can have a significant impact on the costs surrounding a HELOC. When it’s time to repay a $60,000 HELOC, having an interest rate of 6.00% over a 20-year term would mean a monthly payment of $430. An interest rate of 7.00% would require a $465 payment. Over the entire term, a customer with a 7.00% rate would pay $8,477 more in interest. The more you borrow and the higher your interest rate, the larger the numbers.

HELOC Interest Rate Trends

HELOC rates are tied to the prime interest rate set by banks, so getting to know the history of the average prime rate (shown in the chart and graphic below) may help you understand where current HELOC rates in Minnesota fall on the spectrum.

Since 2018, the prime rate has ranged from 3.25% at its lowest in 2020 to 8.50% at its highest in 2023. These fluctuations can have a impact on HELOC vs. home equity loan considerations, in part because, while HELOC rates are variable, home equity loan rates tend to be fixed (more on that below).

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

The prime rate is important, but it’s not the only thing influencing HELOC interest rates in Minnesota. A number of key factors specific to an individual borrower also matter. Understanding them can help you secure the most favorable rates for your loan or line of credit.

Home Equity

Having a sizable amount of equity in your residential property makes you an attractive prospect for lenders, potentially scoring you reduced interest rates. Homeowners typically need a minimum of 15% equity to qualify for a HELOC.

Credit Score

When it comes to securing a desirable interest rate for a HELOC, maintaining your credit score at 680 or higher is a good move. Many lenders even prefer a credit score of 700 or above.

Stable Income

Lenders look hard at your income. They are going to carefully evaluate your ability to repay the HELOC, so stability is important to them. It’s a good idea to use a HELOC monthly payment calculator to make sure you’re able to make the monthly payments.

Loan-to-Value Ratio

Most lenders require your combined loan-to-value ratio (CLTV) to be 90% or less. You can compute your CLTV by adding the existing balance on your mortgage to the amount you hope for your HELOC to be, and then dividing by your appraised home value. Here’s an example:

A homeowner’s property appraises at $500,000. They still owe $300,000 on the mortgage. They are applying for a $120,000 HELOC.

   $300,000 + $120,000 = $420,000

   $420,000 / $500,000 = .84 (aka an 84% CLTV)

Variable vs Fixed Interest Rates

As you read above, HELOCs often carry variable interest rates, subject to change over the loan’s duration. To begin with, variable interest rates often look lower when compared to fixed rates, but by design, they increase or decrease in accordance with market conditions.

Tools & Calculators

Time-saving online tools can assist you in calculating approximate payments and the interest you’ll pay on a HELOC. Our favorites include a HELOC interest-only calculator, which can determine the payments you’ll need to make during the draw period.

How to Qualify for a Competitive HELOC Rate

A checklist for securing a competitive rate on your HELOC can help you get started. These “to dos” will help you to think about factors that lenders will scrutinize when determining your eligibility and interest rate. A solid financial standing can enhance your ability to secure different types of home equity loans and lines of credit.

Cultivate Your Credit Score

When you applied for your home loan, your credit score was paramount. Its importance when you apply for a HELOC is equal. You can build your credit score over time by paying your bills on or before the due dates. Reducing or eliminating credit card balances is also essential. Review your credit report regularly and address errors promptly.

Assess Your Home Equity

Timely mortgage payments help homeowners build home equity. Renovations not only make your home happier — they can enhance your equity by boosting the property’s value. If your home equity is in the single digits or teens, getting approved for a HELOC may be difficult.

Calculate Your Debt-to-Income Ratio (DTI)

Your DTI ratio is how much you pay monthly on debt — like student loans, a car loan, or a personal loan — divided by your gross monthly income. Home equity lenders tend to look for a DTI below 36%. Some allow up to 50%. Calculating your DTI ratio is important, as it can help you determine your eligibility for a HELOC, and whether you’ll qualify for favorable terms.

Application Process for a HELOC in Minnesota

A HELOC application in Minnesota involves several key steps. If you understand the process, your application journey will be smooth and hopefully fruitful.

Step 1. Run the Numbers

Check your credit scores, crunch your DTI, and get an estimate of your home equity before you apply for a HELOC. Some lenders have website options that let you prequalify for a HELOC online, streamlining the application process.

Step 2. Compare Lenders

Look at multiple lenders’ interest rates. Also compare qualification requirements, minimums and maximums, fees, and the lengths of their draw and repayment periods.

Step 3: Gather Your Documents

Putting together your paperwork or digital documentation is a crucial step in applying for a HELOC. Typically you need to present proof of income such as pay stubs and tax returns, documentation of your home’s value, and stubs verifying your mortgage balance . Lenders may ask for your homeowner’s insurance policy and a list of your current debts and assets, too.

If you are self-employed, a lender may ask you for a profit-and-loss statement and two years’ worth of tax returns. Having these documents prepared can make the application process go faster and boost your chances of grabbing a competitive HELOC rate.

Step 4: Submit Your Application

If you find a potential lender that offers an online HELOC application portal, it will make the process that much more efficient. You can also likely submit by phone, or in person if the lender has a brick-and-mortar branch.

Step 5: Get an Appraisal

After you submit your application, the lender will schedule a home appraisal. This is to determine the current value of your property. If your home appraises higher than your outstanding mortgage balance, there’s a good chance the lender will approve your HELOC. The appraisal process might take a few weeks.

Step 6: Prepare for Closing

Before you can access and spend your HELOC funds, you will need to sign loan documents and most likely pay some fees. Your lender may make funds available as quickly as three days following closing. Make sure you understand your loan’s terms and conditions before you sign.

Tax Benefits and Considerations

Before you can access and spend your HELOC funds, you will need to sign loan documents and most likely pay some fees. Your lender may make funds available as quickly as three days following closing. Make sure you understand your loan’s terms and conditions before you sign.

How Much Does a HELOC Cost?

HELOC’s do have costs, but they tend to be lower than those of a typical home loan or mortgage refinance, which can range from 2% to 5% of the loan amount. With a HELOC, the appraisal fee, which can reach $500, is the biggest line item. Application and administrative fees may represent additional charges. Some lenders bill for annual maintenance, as well as transaction, inactivity, and early termination fees. Some lenders may reduce or waive fees but charge a higher interest rate.

Alternatives to HELOCs

HELOCs have competition! Other financing options you could consider include home equity loans, cash-out refinancing, and personal loans. Each has benefits and drawbacks.

Home Equity Loan

Unlike a HELOC, a home equity loan hands you a lump sum. More on what is a home equity loan: Often, you can tap into up to 85% of your home’s equity with one of these. The qualification process is similar to a HELOC, requiring an appraisal.

Another factor in any HELOC vs. home equity loan comparison: You must begin repaying a home equity loan immediately, and because it will have a fixed interest rate, the payments will remain the same over the loan term of 5–30 years. Use a home equity loan calculator to get an idea of what you could borrow and compare the two options.

Here’s a quick look at the two:

Cash-Out Refinance

Homeowners can use cash-out refinancing as another way to leverage a home’s value. This mortgage refinance option is a good one for those who need a large sum of money at once.

When comparing cash-out refinance vs. a home equity line of credit, be sure to note that cash-out refinancing might come with a higher interest rate than other home loans. Cash-out refis draw some borrowers because they prefer to have one payment to keep track of instead of two.

Personal Loan

A personal loan has fixed payments made over 2–7 years. It can be used for almost anything and you won’t have to offer your home as collateral to get one. However, personal loans are likely to have higher interest rates than HELOCs or home equity loans.

Credit Cards

Credit cards carry steeper interest rates than HELOCs, and that factor can balloon your costs if you juggle a big balance. Credit cards are definitely handy for everyday buys, but HELOCs may be a better pick to pay for big-ticket items like a home upgrade or consolidating debt.

The Takeaway

HELOCs offer a helpful, flexible way to tap your home equity. They’re especially useful if you need to borrow money but aren’t sure exactly how much you need, since you’ll only have to pay interest on the amount you use at a given time. With good preparation and efforts to build your credit score and drop your debt level, you can submit an application that will get you a great rate in Minnesota.

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?

An 8.00% interest rate and a 10-year term would require a monthly payment of about $607. The exact amount you’ll pay will always depend on your interest rate and loan term. The same 8.00% rate over a 20-year term would cost you about $418 per month, although you would pay significantly more total interest in the end.

Is a HELOC a smart move for you?

Whether a HELOC is a good idea at this moment depends on your financial scenario and your longer-term goals. HELOCs can help you accomplish home improvements, consolidate debt, or cover other large expenses. But it’s important to consider interest costs, fees, and the potential impact on your home equity before making a decision.

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

Monthly payments on a $100,000 HELOC depends on the interest rate and length of term for the line of credit you’ve chosen. At 6.00% over 20 years, the payment would be $716 monthly. An 8.00% interest rate and the same term would mean a payment of $836.

What are the benefits of a HELOC?

A HELOC is a flexible way to borrow. Rather than taking out a lump sum, you can pull money in smaller increments according to your needs, and at a lower rate than you’d get with a credit card. Plus, you only pay interest on what you borrow.

Do you need an appraisal for a HELOC?

Yes, you do. The appraisal is crucial to the process, since it helps to establish your home’s value, and that in turn determines the amount you’ll be able to borrow. Lenders want to make sure your loan is secured by enough home equity, and will provide details on what type of appraisal is required.

What might prevent you from getting a home equity loan?

Several factors can disqualify you from getting a home equity loan. These include bad credit, a lack of equity in your home, and a high level of debt relative to your income.

How hard is it to get a HELOC?

If you can meet lenders’ requirements of a healthy credit score and optimal debt levels, and you have a minimum of 15% equity in your home, it shouldn’t be hard to get a HELOC. Hardest for many would-be borrowers is compiling the financial documents required for the application. But taking the time to do it carefully and accurately will help move your application process along.

Does HELOC affect credit score?

When you apply for a HELOC, a lender will perform a hard inquiry on your credit report. That could cause a small decrease in your credit score, but it will be temporary. Carrying a large balance on your HELOC could negatively impact your credit utilization ratio and lower your credit score, too. But if you make regular payments to your HELOC account, it will demonstrate that you can use credit responsibly. 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.

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-Q424-033

Compare HELOC rates in South Carolina.

Introduction to HELOC Rates

This guide provides an overview of HELOC interest rates in South Carolina. Our goal is to help homeowners understand all the factors influencing these rates and how to secure the best deal on a home equity line of credit. Readers will learn about the different types of home equity loans, the application process, and how to use online tools to predict your monthly payments and total interest paid. Plus, we’ll explore HELOC alternatives, such as home equity loans, cash-out refinances, and personal loans, so that you have all the information you need to make a smart decision.

What Is a HELOC?

A home equity line of credit, or HELOC, is like a credit card secured by your home equity. It allows you to borrow up to 90% of your home’s value, minus your mortgage. 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.

A HELOC has two phases: draw and repayment.

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-only payments during the draw period, but payments toward the principal may be optional.

The Repayment Period

During the repayment period (10 to 20 years), you pay back the principal with interest in regular monthly payments. Variable interest rates can make repayment somewhat unpredictable — and more expensive if rates rise. Fortunately, a HELOC interest-only calculator can help you predict your payments during this period based on different draw amounts and interest rates, so there are no surprises.

The major risk with a HELOC is that the lender can foreclose on your home if you default. That is true with other ways to get equity out of your home, too. We’ll discuss them later.

Where Do HELOC Interest Rates Come From?

It’s not enough to know What is a home equity line of credit; borrowers need to know a little something about how interest rates work. HELOC interest rates are tied to “the prime rate,” the benchmark rate that lenders set for the most creditworthy customers. HELOC rates are also influenced by Federal Reserve decisions and economic factors. For borrowers in South Carolina, the local housing market weighs on interest rates there.

Understanding all this can help borrowers anticipate rate fluctuations and make informed decisions about the best time for a HELOC.

How Interest Rates Impact HELOC Affordability

Your interest rate can make a big difference in affordability over the course of a HELOC. For example, let’s say you have a $75,000 HELOC with a 20-year repayment term. A 1% difference in interest rate can result in $11,000 in additional interest.

As you can see from the chart below — which shows different total interest amounts based on rate, term, and amount borrowed — it pays to research the best HELOC rates in South Carolina. This table was created with a HELOC repayment calculator; plug in your numbers to see your payment and total interest.

HELOC Interest Rate Trends

The movement of the prime interest rate serves as an indicator of future HELOC rate trends. Since 2018, the prime rate has undergone substantial fluctuations, ranging from a low of 3.25% in 2020 to a high of 8.50% in 2023. The graphic below shows a longer history of the average prime rate over the last 50 years.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Not everyone gets the prime rate. Other metrics factor into the interest rate that you’re offered, such as your home equity position, credit score, income, and combined loan-to-value (CLTV) ratio.

Home Equity

Possessing substantial equity in your principal residence makes you appear less risky to lenders, potentially leading to more favorable interest rates. Typically, homeowners must have a minimum of 15% equity in their property to qualify for a HELOC. You can estimate your equity by checking your home value with an online real estate tool, then subtracting your current mortgage balance.

Credit Score

Maintaining a credit score of 680 or higher is crucial to qualifying for a HELOC. And you’ll secure better rates with a score of 700+. A higher credit score indicates lower risk for lenders.

Stable Income

Lenders evaluate your income to determine your ability to fulfill the HELOC repayment obligations. A consistent income signifies a diminished probability of default, potentially securing more favorable HELOC rates.

Combined 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 will determine your credit limit.

If your home value is $500,000, your mortgage balance is $300,000, and your HELOC balance is $120,000, then your CLTV ratio is 84%. That’s within the acceptable range.

Variable vs Fixed Interest Rates

HELOCs feature variable interest rates, which are subject to change throughout the duration of the loan. Initially, variable interest rates are lower than typical fixed rates, but they fluctuate in accordance with market conditions. It is beneficial to comprehend the distinction between HELOC and home equity loan interest rates in order to make an informed decision.

Tools & Calculators

SoFi provides numerous online tools to assist you in estimating your payments and gaining insight into the financial implications of a HELOC. 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 obtain the most competitive HELOC rates in South Carolina, you may need to do some advance work before applying. Focus on your credit score, home equity stake, and debt-to-income ratio. Here’s your To Do list:

Build Your Credit Score

By consistently paying your bills on time and paying down your credit card balances, you can substantially improve your credit score. A higher credit score can make you eligible for the most competitive HELOC rates available in the South Carolina market.

Assess Your Home Equity

Regular home loan payments help in building equity over time. Home equity can also be enhanced through renovations that boost the property’s value. Increased home equity can lead to better terms and higher amounts when applying for a HELOC.

Calculate Your Debt-to-Income Ratio (DTI)

Your debt-to-income ratio (DTI) is calculated by dividing your total monthly debt payments (student loans, auto loan) by your gross monthly income. Typically, home equity lenders prefer a DTI below 36%, but a lower DTI is always more favorable. A rock-bottom DTI can significantly enhance your chances of securing the most competitive HELOC rates available in South Carolina.

Application Process for a HELOC in South Carolina

If you’re concerned about whether you qualify for a HELOC, you’ll need to take extra care in preparing your application. Each of these steps plays an important role in the process.

Step 1. Crunch the Numbers

Check your credit score, calculate your DTI, and get a good estimate of your home equity before you apply for a HELOC. Some lenders offer online prequalification for a streamlined application process.

Step 2. Compare Lenders

Interest rates vary between lenders, so shop around to see what offers you qualify for with multiple lenders. You’ll want to compare not just interest rates, but also qualification requirements, minimums and maximums, fees, and the length of the draw and repayment periods.

Step 3: Gather Your Documents

When you have selected a lender, remember to gather the required documents for your HELOC application. These usually include proof of income (W-2s, tax returns), employment history (a resume), credit history, and proof of homeowners insurance. Having all this ready can expedite the application process and increase your chances of approval.

Step 4: Submit Your Application

Submitting your HELOC application can take place online, by phone, or in person. The lender will review your application and reach out if any additional information is required. Submitting a complete and accurate application will facilitate a swift approval process.

Step 5: Get an Appraisal

After submitting your application, the lender will arrange for a home appraisal to determine your home’s current value. If your home appraises for more than your mortgage balance, you may be approved for a HELOC. The appraisal is a crucial step in the process, as it directly affects the amount of equity you can access.

Step 6: Prepare for Closing

Before accessing your HELOC funds, you must sign the documents and pay necessary fees. Some lenders obligingly make funds available within three days following the closing of the HELOC loans.

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.

Closing Costs and Fees

HELOC closing costs are typically lower than home-buying and mortgage refinance costs. The appraisal fee ($150-$500) is usually the highest expense. Other costs may include application, origination, and administrative fees. Some lenders charge annual maintenance, transaction, inactivity, or early termination fees. Other lenders may waive closing costs but charge a higher interest rate.

Alternatives to HELOCs

Even if you’re leaning toward a HELOC, it’s smart to check out the alternatives. Each financing option below has its own pros and cons, which suit particular borrowers. Make sure your choice is the best one for your financial needs and goals.

Home Equity Loan

What is a home equity loan? Unlike HELOCs, home equity loans provide a lump sum amount and are paid back immediately 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). This option is suitable for those who need a specific amount of money for a one-time expense.

Review our HELOC vs home equity loan

Cash-Out Refinance

A cash-out refi pays off your original mortgage for more than you owe and gives you the difference as cash. If you’re considering a cash-refinance vs. a home equity line of credit, you should know that 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. A cash-out refi also means a new interest rate and loan terms. If rates have dropped since you initially financed your home, this could be good news.

Personal Loan

A personal loan is an installment loan that you pay back over a term of 2 to 7 years. Interest rates for personal loans are often higher than those for HELOCs or home equity loans because personal loans are unsecured. Some borrowers like the fact that their home isn’t used as collateral. And because you sidestep a home appraisal, the loan approval process may be faster, too.

Credit Cards

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

The Takeaway

HELOCs in South Carolina are known for their competitive rates, flexible repayment, and potential tax benefits. To secure the most favorable South Carolina HELOC rates, borrowers should possess a strong credit score, maintain at least 15% equity in their residential property, and keep their debt-to-income ratio below 36%. It’s also important to shop around with multiple lenders, since each sets their own HELOC interest rates. Just make sure to also compare fees and penalties, qualifications, and the lengths of the draw and repayment periods. If you do your homework, you’ll be well-positioned to secure the best available rates in South Carolina.

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 for a $50,000 home equity line of credit depends on several factors, including prevailing interest rates and the repayment term. Assuming you draw the full amount and make interest-only payments during the draw period, your monthly payment over 20 years could range from $388 (at 7.00% interest) to $483 (at 10.00%). A repayment term of 10 years will mean higher monthly payments but less interest paid over the life of the loan.

Is a HELOC a good idea right now?

A home equity line of credit (HELOC) can be a good financial tool for homeowners with a steady income, strong credit, and ample home equity. HELOCs provide flexibility and convenience for addressing substantial expenses. However, because a HELOC is secured by your home, if you default you could face foreclosure.

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 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 type of revolving credit, similar to a credit card. It offers numerous advantages, including flexible access to funds as required, competitive interest rates, and potential tax deductions. These financial tools can be used for a variety of purposes, including home renovations and debt consolidation.

Do you need an appraisal for a HELOC?

It’s standard practice for HELOC lenders to require an appraisal. This step determines the current market value of the borrower’s property, which is used to calculate your available equity.

What might prevent you from getting a home equity loan?

Several factors may make you ineligible for a home equity loan: a poor credit history, insufficient home equity, a high debt-to-income ratio, and unstable income.

How hard is it to get a HELOC?

The difficulty of securing a HELOC hinges on your financial situation. But if you have a strong credit score (700+), sufficient home equity (15% or more), and steady income, your odds are good. Just be prepared for a rigorous application process, and have your financial documentation ready.

Does HELOC affect credit score?

HELOCs probably will impact your credit score. When you apply for a HELOC, there is a possibility that a hard inquiry will be conducted, which may temporarily lower your score. Additionally, the HELOC can potentially affect your credit utilization ratio, which in turn can have an influence 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.

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-Q424-050

Compare HELOC rates in Maine.

Introduction to HELOC Rates

If you’re reading this, then you’ve probably been steadily paying down your mortgage over a number of years. Now you’re wondering how to get equity out of your home for a major project. We’ll walk you through your options, from HELOCs and home equity loans to cash-out refis. We’ll show you how to compare HELOC offers from multiple lenders and how to spot a good deal. And we’ll share tips for getting your finances in tip-top shape so that you secure the best interest rate possible.

First things first: What is a home equity line of credit, exactly?

What Is a HELOC?

A HELOCis a credit line based on your home’s equity. You can borrow up to 90% of your home’s value, minus your mortgage. 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.

A HELOC has two phases: draw and repayment.

The Draw Period

During the draw period, usually spanning a decade, you are able to access funds up to your credit limit. Interest-only payments are typically required, while principal payments are often optional. If you do want to pay down the principal, you can borrow the funds again. And you only pay interest on the amount you’ve drawn, not the full credit line.

The Repayment Period

After the draw period, you start repaying the principal with interest, usually over 20 years. Because the variable interest rate fluctuates, payments can be somewhat unpredictable. A HELOC repayment calculator can help you estimate your payments and plan accordingly.

Where Do HELOC Interest Rates Come From?

HELOC interest rates are tied to the prime rate, the benchmark interest rate for creditworthy customers. HELOC rates are also influenced by Federal Reserve policy decisions, the economy, and the housing market. While you don’t need to become an interest rate expert, understanding the factors that nudge rates up or down can help borrowers anticipate rate fluctuations and make informed decisions about the best time for a HELOC.

How Interest Rates Impact HELOC Affordability

HELOC affordability hinges on the interest rate you secure. Let’s say you have a $75,000 HELOC. Over a 20-year repayment term, a seemingly insignificant 1% difference in interest rate can snowball into a substantial $11,000 in additional interest paid. The table below shows your monthly payment and total interest paid with different interest rates for the same $75,000 HELOC:

HELOC Interest Rate Trends

Because HELOC rates are tied to the prime interest rate set by banks, getting a sense of the history of the average prime rate (shown in the chart and graphic below) can help you understand where today’s HELOC rates in Maine fall on the spectrum. Since 2018, the prime rate has ranged from a low of 3.25% in 2020 to a high of 8.50% in 2023.

Historical Prime Interest Rate

Historical U.S. Prime Rates

Factors Influencing HELOC Rates

Besides the prime rate, HELOC rates in Maine are influenced by the borrower’s financial profile. Lenders adjust the rate they offer a borrower based on how much of a risk they pose. The rosier your financial picture, the better the rate you’ll get.

Home Equity

Substantial home equity can make borrowers appear less risky to lenders, often resulting in more favorable interest rates. Typically, homeowners need a minimum of 15% equity to qualify for a HELOC. But higher is better. To calculate your equity position, subtract your mortgage balance from your current home value.

Recommended: Home Equity Loan Calculator

Credit Score

You need a credit score of 680 or higher to qualify for a HELOC, and a credit score above 700 will open the door to better rates. Your credit score estimates how likely you are to pay back a loan on time.

Stable Income

Lenders assess your overall income to determine your ability to honor your HELOC obligations. A steady and reliable income serves as a strong indicator of a lower risk of default. Documenting your employment and income, via pay stubs and W-2s, is an important part of the HELOC 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 85% 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 $500,000, your mortgage balance is $300,000, and your HELOC balance is $100,000, then your combined LTV ratio is 80%.

Variable vs Fixed Interest Rates

As we mentioned above, HELOCs feature variable interest rates, which will fluctuate over the course of the draw and repayment terms. These rates initially are typically lower than fixed rates, but adjust up or down in accordance with market conditions. If the idea of a variable interest rate makes you nervous, then a home equity loan — which usually has a fixed rate — might be a better choice for you.

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. The HELOC interest-only calculator shows you what your monthly payment might be during the 10-year draw period.

How to Qualify for a Competitive HELOC Rate

Now that you know all the factors that go into calculating your interest rate, what can you do about it? To get the most favorable HELOC rates in Maine, it pays to do a little advance work before you submit an application. Here’s your To Do list:

☐ Improve to Your Credit Score

Making timely bill payments and reducing credit card balances can significantly boost your credit score. Regularly monitoring your credit report can also provide valuable insights.

☐ Assess Your Home Equity

Remember, you need at least 15% equity in your primary residence to qualify for a HELOC, but more is better. Regular mortgage payments help in building home equity over time. And home equity can be enhanced through renovations that boost the property’s value. Increased home equity can lead to better terms and higher amounts when applying for a HELOC.

☐ Calculate Your Debt-to-Income Ratio (DTI)

Your debt-to-income ratio (DTI) is determined by dividing your total monthly debt payments by your gross monthly income. Generally, lenders prefer a DTI below 36%, though some will stretch that to 50%. However, a lower DTI is always more favorable.

Application Process for a HELOC in Maine

The HELOC application process in Maine entails a thorough review of your financial standing, preparation of required documentation, submission of your application, scheduling of a home appraisal, and patient anticipation of approval and closing. Understanding this process can significantly enhance your chances of securing a HELOC.

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. Some lenders offer online prequalification, simplifying the process. It’s perfectly fine to prequalify with multiple lenders in order to compare offers.

Step 2. Compare Lenders

When comparing lenders, you’ll obviously look at interest rates, but you’ll also want to investigate their qualification requirements, credit line minimums and maximums, fees, the length of the draw and repayment periods, and other factors.

Step 3: Gather Your Documents

Get all the necessary documents for your HELOC application organized before you apply. That includes proof of income (w-2s, pay stubs, tax returns), employment history, and homeownership documents (mortgage statements, proof of insurance). Having these documents ready will significantly expedite the application process, ensuring a smoother and more efficient experience for all parties involved.

Step 4: Submit Your Application

Submitting your HELOC application takes place online, by phone, or in person. Ensure that all required documents are included to avoid any potential delays.

Step 5: Get an Appraisal

A home appraisal is a crucial step in the HELOC application process. If your home appraises for more than your mortgage balance, the lender may approve you for a HELOC. The appraisal helps determine the amount of equity you have in your home.

Step 6: Prepare for Closing

Before finalizing your HELOC, carefully review and sign all relevant documents and pay any associated fees. Some lenders may release funds within three business days of closing the HELOC.

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 HELOCs.

Closing Costs and Fees

HELOC closing costs are generally lower than for home buying or a mortgage refinance. The appraisal fee, typically the highest expense, ranges from $150 to $500. Other costs can include an application fee, origination fee, and administrative fees. Some lenders charge a maintenance fee, transaction fee, inactivity fee, or early termination fee. Understand all potential fees and interest rates associated with your HELOC.

Alternatives to HELOCs

In addition to HELOCs, homeowners have a choice of different types of home equity loans, cash-out refinances, and personal loans. Each of these options has its own distinct advantages and considerations.

Home Equity Loan

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. Here’s a quick comparison of HELOCs vs. home equity loans:

Recommended: What Is a Home Equity Loan?

Cash-Out Refinance

A cash-out refinance lets homeowners tap into their home equity by refinancing for more than they owe on the mortgage, and taking the difference in cash. Cash-out refinancing may have higher interest rates compared to traditional refinancing options. Accessing up to 85% of a home’s value is common.

When comparing a cash-out refinance vs. a home equity line of credit, one thing to keep in mind is that with a new mortgage, you’ll also have a new interest rate. If current rates are higher than your existing rate, you’ll want to carefully tally the costs to make sure refinancing makes sense.

Personal Loan

Unlike a home loan, a personal loan is usually unsecured, meaning you don’t have to put up any collateral. As a result, interest rates are often higher than for secured loans. But it’s a good option for borrowers who don’t have enough home equity to leverage. You take a lump sum, and repay it over 2-7 years. Personal loans can be used for almost any purpose.

Credit Cards

While credit cards offer flexibility for smaller purchases, their high interest rates aren’t suited to larger expenses that you might need to pay off over a longer period of time.

The Takeaway

HELOCs provide a flexible way to access your home equity, making them a popular choice for homeowners. You can take out money as you need it, pay down the balance, and then borrow again. And you only pay interest on the amount you draw, not the full credit line. Lower interest rates and potential tax deductions sweeten the deal. Just make sure to run your numbers — credit score, home equity position, and debt-to-income ratio — to ensure you qualify for a HELOC. And it’s wise to prequalify with multiple lenders to make sure you get the best available deal for your financial profile.

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 about $607. But exactly how much you’ll pay depends on your interest rate and loan term. An 8.00% interest rate over a 20-year term would cost $418 per month.

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 home improvements, debt consolidation, or 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 home equity line of credit is determined by the interest rate and term. If you draw the full amount, have an 8.50% interest rate, and repay what you borrowed (plus interest) over a 20-year term, your monthly payment should be about $868.

What are the benefits of a HELOC?

The benefits of a HELOC include flexible access to funds, competitive interest rates, and potential tax advantages. HELOCs allow you to borrow against your home equity as needed, making them ideal for ongoing projects or unexpected expenses. Additionally, a home equity line of credit can be used for various purposes, from home improvements to debt consolidation.

Do you need an appraisal for a HELOC?

Typically, lenders require a home appraisal for a HELOC to determine the value of your property and the amount of equity you have. However, some lenders may offer options that do not require an in-person appraisal. It’s important to check with your lender to understand their specific requirements.

What disqualifies you from getting a home equity loan?

Several factors can disqualify you for a home equity loan, including poor credit, low home equity, and high debt. Lenders will assess all these things to determine eligibility.

How difficult is it to get a HELOC?

The difficulty of getting a HELOC depends on your financial situation and the lender’s requirements. Lenders consider factors such as credit score, home equity, and debt-to-income ratio when evaluating applications. Preparing your financial documents and comparing offers from multiple lenders can increase your chances of approval.

Does HELOC affect credit score?

A HELOC may impact your credit score. Applying for one can cause a temporary dip due to a hard inquiry. High credit utilization from using a large portion of available credit can also affect your score. On the other hand, making timely payments can build a 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.

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-Q424-029