Compare home equity loan rates in Kansas City.

Introduction to Home Equity Loan Rates

Home equity loans can be a powerful financial resource for homeowners. What is a home equity loan? Simply put, it’s a way you can borrow money by tapping the equity you already have in your home. The cash can be used for major expenditures like home renovations, a child’s college education, or paying down high-interest debt. And the better the interest rate you get on your loan, the better it will be for your finances.

From watching the trends to prepping for your home equity loan application, you’ll find out everything you need to know about home equity loans and their interest rates here. This guide will explore Williamsville home equity loan rates, detailing how they’re affected by broad economic factors as well as your personal financial information. We’ll discuss lenders’ typical requirements for borrowers and the potential advantages and drawbacks of these loans. We’ll also take a look at the different types of home equity loans, including home equity lines of credit (HELOCs) and cash-out refinances.

How Do Home Equity Loans Work?

A home equity loan is one way a homeowner can borrow money against the equity in their home. If you’re not sure how much equity you have in your house, it’s easy to calculate: It’s the market value of your home minus the balance of your existing mortgage.

For example, if your house is worth $250,000 and you still owe $200,000 on your mortgage, you have $50,000 in equity. In general, lenders will loan you up to 85% or sometimes 90% of your home’s equity. In this example, you might be able to borrow up to $45,000. You can use a home equity loan calculator to help you determine your home equity and maximum loan amount.

Since home equity loans are secured by your home, their interest rates tend to be lower than rates for unsecured personal loans. Home equity loans usually have a term between five and 30 years, and the rates are most commonly fixed, which keeps your payments predictable. If you’ve been wondering how to get equity out of your home, a home equity loan could be an answer.

Where Do Home Equity Loan Interest Rates Originate?

Williamsville home equity loan interest rates, like rates nationally, are influenced by many different factors, some relating to the economic situation and some to your personal financial details.

For example, the Federal Reserve’s monetary policy, particularly changes to the federal funds rate, has a significant impact on the broader lending market. Lenders often set their base interest rates by adding a margin to the prime rate, which tends to follow the federal funds rate. If the prime rate increases, you’ll probably see rates for different types of home equity loans, including home equity loans, rise as well.

In addition, your credit score and debt-to-income (DTI) ratio influence the rate you’re offered. A higher credit score and a lower debt-to-income ratio will typically get you more favorable terms. Understanding these factors can help you make the best choice for your situation.

How Interest Rates Impact Affordability

One of the most important elements in determining the overall affordability of a home equity loan is the interest rate. A seemingly small difference in rates can have a major effect on your finances. Say you’re thinking about a $100,000 home equity loan with a 15-year repayment term. At an 8.50% interest rate, your monthly payment would be approximately $986, with total interest over the loan’s life adding up to $77,253.

But if that rate were just one percentage point higher, at 9.50%, your monthly payment would increase to around $1,044, and the total interest you’d pay would rise to about $87,960. That’s more than $10,700 extra you’d pay over those 15 years if you get the higher rate.

The chart below shows more about how changes in your loan amount, interest rate, and term interact to result in different monthly payments.

Fixed vs Adjustable Interest Rates

Home equity loans usually have fixed interest rates, meaning that your payments are exactly the same every month during the duration of the loan. This predictability is a plus for budgeting and long-term financial planning.

However, occasionally, these loans can come with adjustable rates. Adjustable rates may start off at a relatively low rate, but after a set initial period, the loan’s rate can change with the market. The rate’s adjustments create the potential for higher payments down the road – and a sense of unpredictability.

As you weigh your options, think about your financial situation and how you’d handle potential rate adjustments as well as your tolerance for uncertainty.

Home Equity Loan Rate Trends

Predicting interest rate movements with absolute certainty is impossible given the multitude of factors at play. However, by examining recent and historical patterns, we can glean some insights.

The prime rate is, as we’ve mentioned, guides home equity loan rates in Williamsville and across the nation, and it has seen its fair share of fluctuations in the past few years, shifting from a low of 3.25% in 2020 to a high of 8.50% in 2023.

Being aware of historical fluctuations and staying attuned to economic shifts can help you time your application as strategically as possible.

How to Qualify for the Lowest Rates

While you can’t control the prime rate, there is a lot you can do to secure the most favorable home equity loan rates in Williamsville. What you want to deliver to lenders, ideally, is a credit score of 700 or higher, a debt-to-income (DTI) ratio of no more than 50% (or better yet, 36% or less), a stable home value, and good home insurance.

Even if you haven’t decided yet on a HELOC vs. a home equity loan or even a cash-out refinance, the same strategies apply if you want to secure the most competitive interest rates and loan terms.

Maintain Sufficient Home Equity

In general, if you want a home equity loan, you’ll need to keep at least 20% equity in your home. If you’re not sure how much equity you have, it’s easy to calculate. Simply subtract your mortgage balance from your current home value. For instance, if you owe $200,000 on your mortgage but your home is valued at $250,000, you’ve got $50,000 in equity.

Most lenders will loan you up to 85% or 90% of your available equity. In this example, that translates to a loan for as much as $45,000.

A home equity loan calculator can help you assess how much you may be able to borrow.

Build a Strong Credit Score

To help you get the most favorable home equity loan rates, you’ll want a credit score of 680 or higher, with many lenders favoring an even more robust 700+. The better your score, the more it speaks to your financial prudence and the more likely it is to potentially lead to more favorable loan terms.

You can work to elevate your credit standing by being diligent about making payments on time, keeping credit card balances low, and avoiding new debt. Regularly perusing your credit report for inaccuracies and disputing any mistakes you find can also work in your favor. By maintaining a solid credit score, you can put yourself on the fast track to qualifying for lower home equity loan rates and more appealing loan terms.

Manage Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is a key factor when it comes to securing a home equity loan with favorable rates. Lenders typically look for a DTI ratio below 50%, but the sweet spot is even lower, at 36% or less. You can calculate your DTI ratio for yourself by dividing your total monthly debt payments by your gross monthly income.

If you need to improve your DTI ratio, focus on paying down your debts, increasing your income, or, if you can, both. A lower DTI shows lenders that you have managed debt well and can handle more. It can make you a more appealing borrower and potentially convince lenders to offer you better rates and terms on your home equity loan.

Obtain Adequate Property Insurance

Property insurance is a necessity for home equity loans, especially in areas susceptible to natural calamities, like tornados, earthquakes, or floods. Lenders need to be certain that the property you’re using as collateral is safeguarded. Not only will it protect you in case of disaster, securing comprehensive property insurance may also help you snag more favorable home equity loan rates.

It’s a good idea to explore different insurance options to find the best rates and coverage, but be sure you’re including everything your potential lenders want to see covered.

Tools & Calculators

Using online resources like these can empower you to make sound decisions about home equity loan rates and terms. A home equity loan calculator, for instance, can show you what your monthly payments would be based on the loan amount, interest rate, and term. By using online tools to weigh and compare various scenarios, you’re better equipped to pinpoint the best home equity loan rates and terms that align with your budget and financial situation.

Closing Costs and Fees

When you get a home equity loan, you can expect the closing costs to run somewhere between 2% and 5% of the loan amount. The table below shows some typical closing costs.

While some lenders offer no-closing-cost loans, they often come with higher rates.

Tax Deductibility of Home Equity Loan Interest

Here’s a tip: The interest on your home equity loan might just be tax-deductible. For single filers, interest is deductible on the first $375,000 of loan debt. Married couples filing jointly can deduct the interest on up to $750,000 of debt. But remember that you can’t take the standard deduction if you want to claim this – you’ll need to itemize.

To get the most up-to-date information, talk to a qualified tax advisor, who can help you figure out what will make the most sense for your situation.

Alternatives to Home Equity Loans

While a home equity loan can be a solid choice, there are other options to explore that also allow you to tap your home’s equity. Two of these are home equity lines of credit (HELOCs) and cash-out refinances, a kind of mortgage refinance.

The Takeaway

When you’re contemplating a home equity loan in Williamsville, it’s essential to understand the factors that influence home equity loan rates. Building a robust credit score, managing your debt effectively, and ensuring you have adequate property insurance are all key steps to securing the most favorable rates. Alternatives like HELOCs and cash-out refinances offer different features and requirements, so it’s a good idea to compare them with home equity loans, too, to find the most suitable option for your financial goals.

SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.

Compare home equity loan rates in Cincinnati.

Introduction to Home Equity Loan Rates

Welcome to our comprehensive guide on home equity loan rates in Cincinnati, Ohio. What is a home equity loan? Simply put, it’s a way to get a loan by drawing on the money you’ve already invested in your home (your equity).

In this guide, we’ll explore the current home equity loan rates, the factors that influence them, and how to qualify for the most favorable terms. We’ll also look into the differences between fixed and adjustable interest rates, the impact of these rates on your financial plan, and the potential risks and benefits of home equity loans. And we’ll touch on two alternatives that also draw on home equity: home equity lines of credit (HELOCs) and cash-out refinances.

Armed with this knowledge, you’ll be better equipped to decide if a home equity loan is the right choice for you and how to approach the lending process with confidence.

How Do Home Equity Loans Work?

If you’re wondering how to get equity out of your home, home equity loans can be a great option.

A home equity loan allows you to borrow against the equity you have in your home. To calculate your equity, take the market value of your home and subtract the balance of your mortgage. For example, if your home is worth $500,000 and you have a mortgage of $350,000, you have $150,000 in equity. Lenders will typically let you borrow up to 85% or 90% of your home’s equity, meaning that in this example, you may be able to borrow up to $135,000.

Home equity loan rates are typically fixed, and you can choose a loan term of five to 30 years. These loans are best for large expenses such as home renovations or debt consolidation. A home equity loan calculator can help you determine your home equity and maximum loan amount.

Where Do Home Equity Loan Interest Rates Originate?

Home equity loan rates are influenced by a combination of economic and personal factors. The Federal Reserve’s monetary policy, particularly changes to the federal funds rate, has a significant impact on the lending market. Lenders often set their base interest rates by adding a margin to the prime rate, which tends to move in tandem with the Fed’s decisions. For example, if the prime rate increases, you can expect rates for different types of home equity loans to rise as well.

Additionally, your credit score and debt-to-income ratio play a role in the rate you’re offered. Higher credit scores and lower debt-to-income ratios generally lead to more favorable rates.

Understanding these influences can help you anticipate rate fluctuations and make informed decisions about getting a home equity loan.

How Interest Rates Impact Affordability

Your interest rate is a big factor in the affordability game. A single percentage point can add up to significant extra interest over the life of your loan. For example, let’s say you have a $100,000 home equity loan with a 15-year repayment term at 8.50% interest. You’d be looking at a monthly payment of around $985 and total interest of about $77,253.

Now, if that rate were one percentage point higher, at 9.50%, your monthly payment would jump to around $1,044, and the total interest paid would rise to $87,960. That’s an extra $10,707 over the life of the loan. So when considering your options, don’t underestimate the impact of the interest rate.

Fixed vs Adjustable Interest Rates

While home equity loans (unlike HELOCs) most often have fixed interest rates, some lenders do offer them with adjustable rates, so it’s important to understand what impact that can have. Fixed rates are the unsung heroes of predictability, staying constant throughout your loan term and making budgeting easier to manage.

On the flip side, adjustable rates generally kick off lower but are subject to market changes. If the market stays mellow, your rate follows suit, but if it gets tumultuous and rates shoot up, you could be in for a bumpy ride and higher payments.

When you’re pondering fixed or adjustable rates for your home equity loan, consider what matters most to you — steady predictability or the chance for lower initial payments.

Cincinnati Home Equity Loan Rate Trends

As we’ve seen, the trends in home equity loan rates are influenced by different economic factors. Take the prime rate, for instance, which is closely linked to the Federal Reserve’s federal funds rate. It has swung dramatically in recent years, from a low of 3.25% in 2020 to a high of 8.50% in 2023.

Stepping back for a longer historical perspective, below, we can see that the rollercoaster ride is not unique to the last few years.

These fluctuations have a direct impact on home equity loan rates in Cincinnati, making it important to keep your finger on the pulse of current market conditions. While nobody can predict the future with certainty, having a grasp of past patterns can certainly help you time your application to secure a more favorable rate.

How to Qualify for the Lowest Rates

Even if you haven’t decided yet on a HELOC vs. a home equity loan, the tactics are the same to secure the most favorable interest rates: Maintain a strong credit score and keep your debt-to-income ratio in check. Here’s what to do to position yourself for a good rate.

Maintain Sufficient Home Equity

To be eligible for a home equity loan, you need to maintain at least 20% equity in your home. Here’s how you can calculate how much equity you’ve built up: Subtract your mortgage balance from your current home value. For instance, if your mortgage balance is $400,000 and your home is valued at $550,000, your home equity is $150,000.

Most lenders permit you to borrow up to 85% or 90% of your equity, which means you could potentially borrow up to $135,000. Keeping a healthy amount of home equity not only helps you secure attractive home equity loan rates, but it also provides a financial cushion in case you need it.

Build a Strong Credit Score

To qualify for the lowest available home equity loan rates, a robust credit score is your not-so-secret weapon. Lenders are typically on the lookout for scores of 680 or higher, with many favoring the 700+ range. Why? A higher credit score is an indicator of financial responsibility, signaling to lenders that you’re likely to be a safe bet, and that impression can translate to more attractive loan terms.

If you’re in the habit of making timely payments and keeping your credit card balances in check, you’re already on the right track. It’s also a smart move to review your credit report for any inaccuracies and address them before you apply. This proactive step can help you secure a better rate, which means more money saved over the loan’s lifetime.

Manage Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is a critical factor when it comes to qualifying for a home equity loan and scoring the best rates. Your DTI ratio is calculated by dividing your total monthly debt payments by your gross monthly income. A lower DTI ratio signals to lenders that you’re in a good position to handle your monthly payments, making you a more appealing candidate. Lenders generally look for a DTI ratio under 50%, but the sweet spot is 36% or lower.

To lower your DTI, chip away at existing debts or explore ways to increase your income, which can include anything from side hustles to career advancements.

Obtain Adequate Property Insurance

Property insurance is a must-have for most home equity loans, especially if you live in an area vulnerable to natural disasters. It’s a safety net for both you and the lender in case of property damage. Make sure your insurance policy covers not just your home’s value but also any improvements you’re planning to make. If you’re not sure about the appropriate coverage, a chat with your insurance agent can set you on the right path.

Tools & Calculators

Online tools and calculators can be your best friends when it comes to home equity loans. They help you estimate monthly payments, total interest paid, and the impact of different home equity loan rates on your finances.

Closing Costs and Fees

When it comes to home equity loans, you can expect to pay anywhere from 2% to 5% of the loan amount in closing costs. These can include fees for appraisals, credit reports, and more. The chart below shows some of the most common.

Some lenders may offer no-closing-cost loans, but be mindful of potentially higher rates.

Tax Deductibility of Home Equity Loan Interest

Here’s a tip that could save you some money: The interest on your home equity loan might just be tax deductible if it’s used to improve your home. For single filers, interest is deductible on the first $375,000 of loan debt. Spouses filing together can deduct the interest on up to $750,000 of debt. Just remember, you’ll need to itemize to claim this deduction. Consult your tax advisor to get the most up-to-date advice.

Alternatives to Home Equity Loans

There are a few alternatives to home equity loans, including HELOCs and cash-out refinancing, which both let you tap your home’s equity as collateral. HELOCs allow you to borrow up to a certain amount of money with a variable interest rate. A cash-out refinance is a type of mortgage refinance that lets you replace your current mortgage with a one that’s larger than the amount you still owe on your house, allowing you to take the difference in cash.

The Takeaway

When you’re considering a home equity loan in Cincinnati, it’s important to understand the factors that can influence your rate so you can work to improve your options. A strong credit score, a manageable debt-to-income ratio, and property insurance can help you secure better terms. HELOCs and cash-out refinances have different features, so compare your options to find the best financing – online calculators can help. And as always, it’s a good idea to consult with a qualified financial advisor to make the most informed decision for your situation.

SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.

Compare home equity loan rates in Tucson.

Introduction to Home Equity Loan Rates

If you own your home, a home equity loan can be a powerful financial resource. In this article, we’ll explore how. First things first: What is a home equity loan? It’s a way you can leverage the equity you’ve built up in your home to access a lump sum, usually at a fixed interest rate.

This is your comprehensive guide to home equity loan rates in Tucson, AZ. We’ll delve into how these rates are determined by a mix of economic and personal financial factors. We’ll also explore the potential benefits and pitfalls of different types of home equity loans, including home equity lines of credit (HELOCs) and cash-out refinances, and provide you with practical tips to secure the most favorable rates. Whether you’re planning a major home makeover, trying to streamline your debt, or have your sights set on a significant purchase, understanding home equity loan rates will empower you to make the right financial choice for you.

How Do Home Equity Loans Work?

A home equity loan is essentially a second home mortgage. It draws on the value you already own in your home and allows you to borrow a lump sum of money, which you can use for a variety of purposes.

After you’ve received your funds, you pay back your home equity loan in monthly installments over a period of five to 30 years, depending on the term of your loan. Your home secures the loan, so the interest rate is generally lower than you’d find with an unsecured personal loan. Most home equity loan interest rates are fixed, meaning that your monthly payments will stay the same throughout the life of the loan.

If you’re wondering how to get equity out of your home, home equity loans can be a great option. To qualify for a home equity loan, you’ll typically need to have at least 20% equity in your home. In other words, your mortgage balance should be no more than 80% of your home’s market value.

Where Do Home Equity Loan Rates Come From?

The interest rate on your home equity loan is determined by a variety of factors, including economic conditions and your personal financial situation. The Federal Reserve’s changes to the federal funds rate affect the prime rate, which affects home equity loan rates. For instance, if the prime rate increases, you can expect rates for home equity loans to rise as well.

Your personal credit score and debt-to-income ratio are also key factors in determining the interest rate you will be offered. Additionally, the amount of the loan and the repayment term can influence the rate, with larger loans and longer terms sometimes resulting in a higher rate due to increased risk to the lender.

How Interest Rates Impact Home Equity Loan Affordability

Your interest rate is a pivotal factor in the overall affordability of a home equity loan. Even a seemingly small difference in rates can have a significant impact on your finances. Let’s say you’re considering a $100,000 home equity loan with a 15-year repayment term. At an 8.50% interest rate, your monthly payment would be approximately $986, with total interest over the loan’s life amounting to $77,253.

But if that rate were just one percentage point higher, at 9.50%, your monthly payment would increase to around $1,044, and the total interest paid would rise to about $87,960. That’s more than $10,700 over the loan’s life if you get the higher rate.

The chart below illustrates how changes in your loan amount, interest rate, and term interact to result in different monthly payments.

Fixed vs Adjustable Interest Rates

Home equity loans most often come with fixed interest rates. A chief benefit of this is that your monthly payments will remain the same throughout the entire duration of your loan.

Other kinds of loans, including HELOCs, typically have adjustable rates, which start out with a fixed rate for a set period and then adjust in accordance with the market. Fixed rates might be a touch higher than adjustable ones at the start, but they provide a predictability that can be reassuring as you plan your monthly and yearly budget. On the other hand, adjustable rates do often kick off at a lower rate, but during their adjustable stage, they are subject to market shifts, which could end up costing you more in the long run.

As you’re comparing home equity loan rates, think about how important stability is to you versus the potential for lower initial costs with adjustable rates.

Home Equity Loan Rate Trends

Predicting future trends in interest rates is tricky at best — there are an enormous number of factors at play. Let’s look at the prime rate, a major factor in home equity loan interest rates. Its recent history demonstrates just how variable it is. As you can see in the chart below, it plummeted to 3.25% in March of 2020 and soared to 8.50% in July, 2023.

Fluctuations like these have an immediate impact on home equity loan rates in Tucson, making it crucial to stay on top of current market conditions. While nobody can predict the future with absolute certainty, understanding past patterns may help you time your application to get a more favorable rate.

How to Qualify for the Lowest Rates

To secure the most favorable home equity loan rates, your financial game plan needs to be solid. Here’s what lenders are looking for: a credit score of 700 or higher, and a debt-to-income (DTI) ratio no more than 50% (or better yet, 36% or less).

Even if you haven’t decided yet on a HELOC vs. a home equity loan, the tactics are the same to get yourself in shape to secure the most competitive interest rates and loan terms.

Maintain Sufficient Home Equity

To be eligible for a home equity loan, you need to maintain at least 20% equity in your home. Calculating your equity is easy: Simply subtract your current mortgage balance from your home’s appraised value. For example, if your mortgage balance is $400,000 and your home is valued at $550,000, your equity is $150,000.

The amount of equity you have is important, since it determines the maximum loan amount you can get and the rate you can secure. Most lenders let you borrow as much as 85%, or sometimes 90%, of your available equity. In the example above, that translates to a loan of up to $135,000. A home equity loan calculator can help you evaluate exactly how large a loan you may be able to access.

Build a Strong Credit Score

To help you get the most favorable home equity loan rates, you’ll want a credit score of 680 or higher, with many lenders favoring a robust 700+. A solid credit score bears witness to your past financial prudence and can open doors to more attractive loan terms.

Looking at your credit report, lenders typically take into account your payment history, credit usage, and the length of your credit history when assessing your creditworthiness. By consistently paying your bills on time and keeping your credit card balances in check, you can maintain or even increase your score’s health. Regularly reviewing your credit report for any inaccuracies and disputing them if necessary can also be prudent.

Manage Debt-to-Income Ratio

Your debt-to-income (DTI) ratio is a critical factor in qualifying for a home equity loan. This ratio compares your monthly income to your monthly debt obligations, including the proposed home equity loan payment. Lenders generally require a DTI ratio below 50%, and ideally below 36%.

Improving your DTI involves paying down your existing debts, increasing your income, or both.

A lower DTI ratio demonstrates that you have managed debt well and that you can afford the loan you’re asking for. It can help your chances of securing a home equity loan and may also help you qualify for better home equity loan rates.

Obtain Adequate Property Insurance

Property insurance is a must-have for home equity loans, especially if you’re in an area that’s at risk for natural disasters, like floods. Lenders need to know that the property securing the loan is well-protected. Having the right insurance can also save you from extra costs and worries if the unexpected occurs.

When you’re ready to apply for a home equity loan, make sure you have all the necessary documentation to show that your house is fully insured. Not only does this protect your investment, but it also keeps you in good standing with your lender, which could help you secure more attractive home equity loan rates.

Tools & Calculators

Online tools and calculators can help you estimate loan amounts and monthly payments based on your home’s equity, your credit score, and other financial factors. They can also help you see how different interest rates and loan terms can impact your monthly payments. By inputting your specific details, you can make more informed decisions and choose the home equity loan that best fits your needs.

Closing Costs and Fees

Home equity loan closing costs usually cost between 2% and 5% of the loan amount, so it’s smart to remember them as you plan your loan.

These costs can include a variety of expenses, such as appraisals, credit reports, document preparation, loan origination fees, notary fees, and the costs associated with title searches and insurance. Here are some typical prices:

•   Appraisal fee: $300-$500

•   Credit report fee: $30-$50 or more

•   Document preparation: $100-$500 (may also be billed on an hourly basis if an attorney is involved or be built into the loan origination fee)

•   Loan origination fee: 0.5%-1.0% of the loan amount

•   Notary fee: $20-$100

•   Title insurance fee: 0.5%-1.0% of the loan amount

•   Title search fee: $75-$250 or more

While no-closing-cost home equity loans are sometimes an option, they often come with higher interest rates.

Tax Deductibility of Home Equity Loan Interest

There’s another benefit of home equity loans to consider.

If you’re taking out the loan in order to improve your home, the interest on your home equity loan may be tax deductible. For single filers, interest is deductible on the first $375,000 of loan debt. Spouses filing together can deduct the interest on up to $750,000 of debt. But remember that you’ll need to itemize if you want to claim this deduction.

Currently, this tax break runs through 2025. It may be extended beyond that, though, so consult your tax advisor to get the most up-to-date information and advice.

Alternatives to Home Equity Loans

Although home equity loans are a popular choice, there are other options to consider if you’re in a position to draw on your home equity. A home equity line of credit (HELOC) is a flexible solution that offers a revolving line of credit with variable interest rates. Another alternative is a cash-out refinance. It’s a kind of mortgage refinance that allows you to replace your current mortgage with a new one that has a higher balance.

The Takeaway

When you’re ready to explore home equity loans in Tucson, it’s important to have a strong credit score, a manageable debt-to-income ratio, and adequate property insurance, as these factors can affect the rates you’re offered. Online tools and calculators can help you estimate your payments and loan amounts. Be sure to consider the closing costs and fees, so you can budget for the total cost of the loan. And don’t forget to weigh the pros and cons of other options, like HELOCs and cash-out refinances, to find the right option for you.

SoFi now offers home equity loans. Access up to 85%, or $350,000, of your home’s equity. Enjoy lower interest rates than most other types of loans. Cover big purchases, fund home renovations, or consolidate high-interest debt. You can complete an application in minutes.