Current Home Equity Loan Rates in Lincoln, NE Today
LINCOLN HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Lincoln, NE.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Lincoln.
Key Points
• Home equity loan rates in Lincoln, Nebraska, are influenced by economic factors as well as the borrower’s creditworthiness.
• Take time to compare offers from multiple lenders to find the lowest interest rates and terms.
• By boosting your credit score and reducing your debt-to-income (DTI) ratio, you may see the interest rates you’re offered drop.
• If you want to qualify for a home equity loan, you will need to have built at least 20% equity in your home.
• Choose a loan with a fixed rate for predictable monthly payments, or an adjustable rate for more flexibility.
• The interest you pay on home equity loans may be tax-deductible if you use the funds to pay home-related expenses.
Introduction to Home Equity Loan Rates
What is a home equity loan? First of all, it’s a great way for you, a Lincoln homeowner, to access the value you’ve built in your home. But that is not all. This type of loan is a useful option that many people use to relieve pressure when they need cash.
This guide will cover everything you ought to know about home equity loans. We’ll discuss factors that affect loan rates and offer you tips for getting the best rates. We will also explain the different types of home equity loans, including a home equity line of credit (HELOC) and a cash-out refinance, so you will know the alternatives, and the pros and cons of each.
Whether you have a home renovation project planned, you’re working to consolidate high-interest debt, or you are preparing to make a major purchase, an understanding of home equity loan rates in Lincoln can help you make smart financial decisions.
How Do Home Equity Loans Work?
A home equity loan is a second mortgage. You secure a new mortgage that is bigger than what you currently owe on your home, then receive the difference as a lump sum of cash. You then repay the new mortgage, usually in fixed monthly installments, over a period of five to 30 years. The loan is secured by your home, and that may help you access lower interest rates than you would get with an unsecured personal loan.
One important thing you ought to keep in mind: To draw on the equity in your home, you have to actually have equity in your home. Yes, you may be working to pay off your mortgage, but the total money you owe shouldn’t be greater than the house’s current value. Typically, lenders want you to have built up at least 20% equity in your home to qualify.
HELOCs vs Home Equity Loans
Looking at a HELOC vs. a home equity loan is where many folks begin their comparisons as they search for the right financing tool for their situations. Here’s how these two loan types compare. If you are trying to figure out how to get equity out of your home, either one of them will help you achieve your goal.
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow plus interest; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need | Lump sum |
Where Do Home Equity Loan Interest Rates Originate?
The rates that are offered to borrowers by lenders are the product of many influences, including the consumer’s own financial standing and the broad economic landscape.
Federal Reserve policy decisions — including federal funds rate changes — can send ripples through the lending market, causing changes that impact the prime rate. When the prime rate moves up or down, home equity loan interest rates usually move along with it. If you watch the prime rate, you can anticipate rate shifts and make confident decisions about when to move on a home equity loan.
As was the case when you qualified for your original home loan in Lincoln, your credit score and DTI ratio are also key drivers of the rates you’ll be eligible for as a potential borrower. But we’ll get into that later.
How Interest Rates Affect Home Equity Loan Affordability
The interest rate you get for your home equity loan can make a world of difference in how affordable it is, in both the short- and long-term. Even a seemingly small difference in the rate can lead to significant savings or greater costs down the road.
To demonstrate how much an interest rate can impact your loan’s total cost, the chart below shows expected monthly payments and the total interest you’ll pay for a $75,000 home equity loan. We have calculated both your monthly payment and the total interest you’ll pay at several rates, assuming you’ve secured a 20-year term.
If you have an 8.00% interest rate, your payment each month is approximately $627; total interest over the 20-year term adds up to $75,559. If the interest rate is just one percentage point lower, or 7.00%, your payment would be reduced to about $581, and your total interest would add up to $64,554. That’s right: The difference in interest is more than $11,000. That lower rate could really save you a lot.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.00% | $627 | $75,559 |
| 7.50% | $604 | $70,007 |
| 7.00% | $581 | $64,554 |
Fixed vs Adjustable Interest Rates
Home equity loans for the most part have fixed interest rates. But lenders may offer adjustable rates, and different types of home equity financing, including HELOCs and cash-out refinances, also offer adjustable rates. It’s a good idea to really consider which you might prefer.
A fixed rate never changes during the loan’s life, so with that option, you’ll have consistent monthly payments over the repayment term. That predictability is helpful for everything from short-term budgeting and long-view financial planning.
Adjustable rates work differently. They will often start off slightly lower than fixed rates, but change after an initial period in accordance with the market. That sometimes leads to higher payments, and it can also create uncertainty about what to expect over the loan’s term.
When you stop to ponder home equity loan rates, it’s smart to consider just how fixed versus adjustable scenarios could affect you, taking into account your financial standing and comfort with risk.
Home Equity Loan Rate Trends
If you’re thinking about how to draw equity from your home, you may be hoping you can time your loan application to achieve the lowest possible rate. You can try! Unfortunately, predicting the prime rate is a little like playing a slot machine: Lucky hits are elusive.
Not all borrowers have endless time to wait for a dip in the prime rate — even though it’s true it has seen its fair share of ups and downs, as you can see from the graphic. If you need a loan, focus on comparing offers from different lenders in search of the best rates. And work on positioning yourself to get the lowest possible rate by staying in control of your own financial profile.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
How to Qualify for the Lowest Rates
To secure the most competitive home equity loan rates in Lincoln, keep these few factors in mind, regardless of what type of loan you decide to shop for. Take the following steps before you begin the application process, and you’ll be in a position to land a home equity loan with a favorable and manageable interest rate and term.
Maintain Sufficient Home Equity
You’ll need at least 20% equity in your home before you try to qualify for a home equity loan. You can easily figure out what percentage of equity you’ve accrued: First, subtract your outstanding mortgage balance from your home’s estimated value. Next, divide the answer you get by that estimated home value from the last step to arrive at a percentage of equity. A higher percentage is always better when we’re talking about equity.
Build a Strong Credit Score
To get the very best home equity loan rate out there, you’ll want to have an impressive credit score. Lenders tend to seek a score of 680 or higher, with many preferring a score above 700. Higher credit scores are a relied-upon sign of financial savvy — they can open doors to more favorable loan terms for borrowers. To improve yours, focus on timely payments, reducing credit card balances, and avoiding new debt. You’ll boost your chance to qualify for a lower interest rate.
Manage Debt-to-Income Ratio
Your DTI ratio is an important factor when you want to qualify for a home equity loan and are hoping to get a good rate. Lenders typically want to see your DTI ratio somewhere around 50% or less — and if it’s 36% or lower, it will help you qualify for the lowest rates. Manage your DTI effectively by paying down your existing debt and increasing your income. If you can achieve some combination of the two, even better.
Obtain Adequate Property Insurance
Property insurance is a must-have when you’re trying to qualify for a home equity loan. Homeowners’ insurance is a safety net for both you and the lender should damage to the home occur. Make sure your coverage is comprehensive and up-to-date.
Tools & Calculators
Before you begin taking steps to borrow against your home, consider doing some math so you can fully understand the borrowing opportunities available to you. It’s important to know how much you will spend over the life of your loan, since there is a cost for the convenience of having the money you need now.
Look to a home equity loan calculator to help you figure out just how much of a loan you’ll qualify for. Other online tools and calculators can help you determine what your home equity loan payments will be each month, and how much interest you’ll pay at the best rates you qualify for. These useful calculators make crunching the numbers a cinch.
Run the numbers on your home equity loan.
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Home Equity Loan
CalculatorEnter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
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HELOC Payment
CalculatorPunch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
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HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
If you are wondering what the closing costs might be on your home equity loan, they typically total 2% to 5% of the loan amount. The table below lists some common closing costs and tells you about how much they will add to your out-of-pocket for the loan.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document preparation | $100-$500 (may be billed on an hourly basis if attorney involvement is required, or built into the loan origination fee) |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
Note that some lenders may offer no-closing-cost loans, but they frequently come with higher rates that offset the suggested discount. This deal will generally be less desirable over the loan’s life.
Tax Deductibility of Home Equity Loan Interest
The interest you’ll pay on your home equity loan could be tax-deductible if you use the funds to improve your home. Single tax filers can deduct the first $375,000 of loan debt. Married couples who file jointly can deduct up to $750,000 of debt. You’ll have to itemize your writeoffs. A tax advisor can help you figure out just what is allowable.
Alternatives to Home Equity Loans
Home equity loans are a desirable option for many homeowners, but other ways to borrow against your equity are available, too. Before you decide, take a quick look at some other popular options, including a home equity line of credit and a cash-out refi.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? Also known by its acronym, HELOC, it’s a bit like a special credit card for homeowners who’ve built strong equity. A HELOC offers you the freedom to borrow up to a set amount and pay interest just on the money you use.
There’s often an initial “draw” period during which you can withdraw funds, followed by a repayment period in which you repay both principal and interest. Rates are generally adjustable. Unlike a home equity loan, a HELOC is about flexibility — but keep in mind that adjustable interest rates may mean that your payments will fluctuate.
To qualify for a HELOC, you’ll generally need a credit score of 680 or higher (700 is that much better) and a DTI ratio that is under 50% (ideally below 36%). A HELOC may permit you to borrow up to 90% of your accrued home equity.
Check out our HELOC repayment calculator for an idea of how the loan would look as you pay it down. To calculate the interest you’ll have to pay during the “draw” period of a HELOC, give our HELOC interest-only calculator a try.
Cash-Out Refinance
The special mortgage refinance often referred to as a “cash-out refi” lets you replace your existing mortgage with a new, larger one, and pocket the difference to use as you desire. The amount you can cash out will be determined by the home equity you’ve built, with most lenders allowing you to borrow about 80% of it. Typically, you’ll need a credit score of 620 or above and a debt-to-income ratio under 43% to qualify.
One perk of a cash-out refi is that you often get to choose between a fixed rate and a variable one. This quick guide can help you compare the three — a home equity loan vs a home equity line of credit vs. a cash-out refinance
| Home Equity Loan | HELOC | Cash-Out Refinance | |
|---|---|---|---|
| Borrowing Limit | Up to 85% of borrower’s equity | Up to 90% of borrower’s equity | 80% of borrower’s equity for most loans |
| Interest Rate | Fixed | Generally variable | May be fixed or variable |
| Type of Credit | Installment loan: Borrowers get a specific amount of money all at once that they then immediately begin repaying, with interest, in regular installments. | Revolving credit: Borrowers receive a line of credit. They have a draw period (5-10 years) during which they borrow and can only pay interest, followed by a repayment period (10-20 years) to repay the principal plus interest. | Installment loan: Borrowers receive a lump sum payment from the excess funds of their new mortgage, which has a new rate and repayment terms. |
| Repayment Term | Generally 5-30 years | A draw period of 5-10 years, followed by a repayment period of 10-20 years | Generally 15-30 years |
| Fees | Closing costs (typically 2-5% of the loan amount) | Closing costs (typically 2%-5% of the loan amount), plus other possible costs, depending on the lender (annual fees, transaction fees, inactivity fees, early termination fees) | Closing costs (typically 2-5% of the loan amount) |
The Takeaway
If you’re thinking about a home equity loan in Lincoln, you’ll benefit from studying up on the key factors driving loan rates. Your credit score, DTI ratio, and equity level will all play a role in the interest rate you get. And shopping around can help you get the best rate available. If you decide that a home equity loan isn’t the right fit for you, remember that HELOCs and cash-out refinances have their own benefits.
SoFi now offers home equity loans. Access up to 85%, or $750,000, 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.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What are the common uses for a home equity loan?
A home equity loan is a versatile and useful tool, and many individuals choose them to borrow cash so they can pay for home improvements, finance other major expenses, or consolidate high-interest debt. You’ll want to use the funds in the smartest way possible and consider how the loan complements your bigger financial picture.
What will the monthly payments look like on a $50,000 loan?
Your monthly payment amount on a $50,000 home equity loan will depend on both the interest rate and the loan term. If you get your loan at a 7.00% interest rate over 15 years, your monthly payment would be about $449. At a 9.00% rate over 15 years, the payment will be close to $507. A loan calculator can help you figure out payments easily, with different variables and terms.
What could disqualify you from getting a home equity loan?
Different factors could interfere with your efforts to secure a home equity loan. One might be that you don’t have the minimum credit score of 680 or more, typically required by lenders. A higher debt-to-income (DTI) ratio – often above 50% – might get in your way, too. If you’ve got less than 20% equity in your home, that will very likely put off lenders, as could signs that your home’s value is unstable or that your property insurance isn’t up to snuff. Qualifications vary by lender, but these are common dealbreakers.
What are some of the benefits of a home equity loan?
Home equity loans often have fixed interest rates, and that means borrowers have predictable monthly payments to make budgeting easier. These loans usually have lower rates than unsecured personal loans, so they are cost effective for big, one-off expenses like home improvements or high-interest debt consolidations. You should balance these benefits with potential risks, such as the threat of foreclosure if you happen to fall behind on payments.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q324-339
More home equity resources.
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What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Current Home Equity Loan Rates in Dayton, OH Today
DAYTON HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Dayton, OH.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Dayton.
Key Points
• Home equity loan interest rates are influenced by the prime rate and, from a distance, the Federal Reserve’s monetary policy — but the borrower’s financial profile also brings important factors to the equation.
• Comparing rates from multiple lenders is wise, and it’s the only way to find the best deal and loan terms.
• If you can boost your credit score and reduce your debt-to-income (DTI) ratio, you may see the rates you are offered by lenders drop.
• You’ll need 20% equity or more in your home to qualify for a home equity loan.
• Choose fixed rates if you are looking for predictable monthly payments. Look at adjustable rates for flexibility (at the possible cost of higher payments later on).
• Interest on home equity loans might be tax-deductible if you plan to use the funds to pay for home-related expenses.
Introduction to Home Equity Loan Rates
Let’s begin with the basics. What is a home equity loan? It is a great way for homeowners to access the value they have built in their homes, and also an option many people with equity use when they need cash.
In this article, we’ll cover everything you’ll want to know if you’re thinking about pursuing a home equity loan. We will discuss factors affecting loan rates and give you tips for securing the best rates that are out there.
We’ll also explain and define different types of home equity loans, including options like home equity lines of credit (HELOCs) and cash-out refinances. This will make you aware of available alternatives, along with the pros and cons of each.
Whether you are considering embarking on a home renovation, wanting to consolidate high-interest debt, or preparing to make a major purchase, understanding home equity loan rates in Dayton can help you to make the smartest financial decisions.
How Do Home Equity Loans Work?
If you’re still in the process of paying off your original mortgage — like most people — a home equity loan is considered a second mortgage. It is a product that lets you tap into your home’s equity and withdraw a lump sum of cash.
You will immediately begin to repay that loan, usually in fixed monthly installments. You’ll decide how long to take to pay it off, usually over a 5- to 30-year term. The loan is secured by your home, and that means you’ll likely have access to a lower interest rate than you could get on an unsecured personal loan.
One important thing you need to know: If you want to draw on the equity in your home, you have to actually have equity in your home. Lenders will typically want you to have a minimum of 20% equity in order to qualify. If you are still paying off your mortgage, the money you owe should not be more than your house is worth.
HELOCs vs. Home Equity Loans
Looking at a HELOC vs. a home equity loan is where many homeowners begin comparing options. Here’s a view of these two types of borrowing options side by side, so you can see how they measure up if you use one to pull equity from your home.
Finding the right loan is often a matter of priorities, including whether you are more seriously looking for flexibility or long-term stability. A home equity loan’s interest rate is generally fixed, which can give you the peace of mind of predictable payments over the life of the loan.
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow plus interest; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need | Lump sum |
If you’ve been making a concerted effort to pay down your mortgage and are wondering how to get equity out of your home, a home equity loan may be the optimal choice for you.
The Origin of Home Equity Loan Interest Rates
Multiple factors go into determining what home equity loan rates in and near Dayton look like. These include not just big-picture economic conditions, but also the details of your individual financial profile.
Increases in the federal funds rate and the prime rate, for example, often lead to rises in home equity loan rates. Federal Reserve policies do not have a direct impact on home equity loan interest rates, but they can have an influence on lenders’ base rates, and thus, down the line, the rates they charge borrowers for loans.
Understanding such influences will enable you as a borrower to anticipate rate fluctuations and make informed decisions about different home loans, including home equity loans.
Your credit score and debt-to-income ratio will also influence the rate you’re offered by lenders. Additionally, the amount of the loan you are seeking and the length of your repayment term will impact your rate. The larger the loan and the longer the term, in general, the higher the rate you’ll get — this is due to risk factors for lenders and the amount of time they will need to wait for full repayment.
How Does an Interest Rate Impact Home Equity Loan Affordability?
You are probably already seeing how it pays to look for the best interest rates, no matter what loan you’re shopping for. There’s no question that your interest rate will be a major factor when it comes to the affordability of your financing — home equity loan or a HELOC — overall. As of late July 2025, the average home equity loan interest rate was 8.28%.
This chart details numbers for a $75,000 home equity loan with a 20-year repayment term, calculating the payments and the total interest at various interest rates. If you have an 8.00% interest rate, your monthly payment would be $627, and you’d pay $75,559 in interest over the loan’s term. With a 7.00% rate — just one percentage point lower — your payment would be $581, and your total interest $64,554. If you’re able to get the lower rate, you’ll end up saving $11,005 over the life of the loan. And even if you get a 7.50% rate, you’ll still pay $5,552 less in interest.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.00% | $627 | $75,559 |
| 7.50% | $604 | $70,007 |
| 7.00% | $581 | $64,554 |
Fixed vs Adjustable Interest Rates
When it comes to comparing a HELOC to a home equity loan, the second option tends to have a fixed interest rate. With a home equity loan, monthly payments generally don’t change — they’ll stay the same for the loan’s entire term. These rates do like to try to trick you, though. A fixed rate may start off higher than the adjustable one advertised next to it. But despite initial appearances, a fixed option is usually the better choice. Its stability means that your payments won’t rise as they can if you opt for a variable rate.
Adjustable rates can appear attractive at first glance, but keep in mind that after a defined period, that rate will “adjust.” This means it will begin to follow a market index — and could easily jump higher than the initial rate you signed up for. Rates can continue to fluctuate over the life of an adjustable-rate loan, so payments can feel unpredictable as you look to the future.
If you are deciding between these two kinds of rates, think carefully about your financial goals, your budget’s flexibility, and the amount of risk you are going to feel comfortable with.
Home Equity Loan Rate Trends
Thinking about how to get equity out of your home, you may decide you’ll try to time your loan application to achieve the lowest possible rate. You could get lucky! Unfortunately, predicting the prime rate is like forecasting the weather. Sometimes the direction things will go is impossible to guess, and not all borrowers have time to wait for the most favorable conditions.
How Much Does the Prime Rate Fluctuate?
The answer is, a lot — when you look at its movement over decades. The prime rate has seen its fair share of ups and downs, as you can see from the graphic and chart. It is not always predictable, and a drop is not necessarily in the near future at any given moment.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
If you need a loan, focus to begin with on comparing offers from different lenders. Work on positioning yourself to get the best possible rate, too. How? By controlling the things you actually can.
How Can You Qualify for the Lowest Rates?
To succeed at securing Dayton’s most competitive home equity loan rates, you should zero in on a few factors. Take these steps before you begin the application process. You will be in a better spot to line up a home equity loan with rates and terms that are not only manageable, but hopefully beneficial to your financial long game.
Maintain Sufficient Home Equity
The amount of home equity you have in your home will be important. In general, you’ll have to have at least 20% equity in your home to qualify for a home equity loan.
To calculate it, you can use a simple equation: First, subtract your outstanding mortgage balance from the estimated value of the home. Next, divide the figure that results by your home’s estimated value. You will arrive at the percentage of equity you now possess. The higher it is, the better situation you are in.
Build a Strong Credit Score
Your credit score can help you land the best available home equity loan rate. Dayton lenders are likely to look for a robust score of 700 or higher. Higher credit scores are signs of financial fitness — they almost always open doors to favorable loan terms.
Manage Debt-to-Income Ratio
When it comes to qualifying for a home equity loan and getting a great rate, your DTI ratio is important. Lenders often look for a DTI ratio of 50% or less — and 36% or lower may give you a real chance at qualifying for the lowest rates. How can you manage your DTI? Work on paying down your existing debt, increasing your income, or achieving a combination of the two.
Have the Right Property Insurance Plan
One must-have for a home equity loan is proper insurance coverage to protect both you and your lender should something unexpected strike your home or land. Be sure that your coverage is active and confirm annually that it’s sufficient, especially as you complete improvements.
Useful Tools & Calculators
If you’re taking steps to borrow against your home, you might want to run some numbers so you can understand what borrowing opportunities will be available to you, and what to expect to spend for future loan payments. A home equity loan calculator and other digital tools can make the math easy for you. Here are a few we use often.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
If you are wondering about closing costs on a home equity loan, they are likely to set you back about 2% to 5% of the loan amount. The table below details common closing costs and tells you about how much borrowers often pay for them.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document preparation | $100-$500 (may be billed on an hourly basis if attorney involvement is required, or built into the loan origination fee) |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
Some lenders may offer no-closing-cost loans, but borrowers beware: They frequently come with higher rates built in, making them less desirable over the term of the loan.
Tax Deductibility of Home Equity Loan Interest
Interest on your home equity loan may be tax-deductible if you’re using the funds to improve your home. For single filers, interest on the first $375,000 of loan debt is deductible. Married couples who file jointly can deduct interest on up to $750,000 of debt. You’ll need to itemize if you want to take advantage of this option, so be sure to track your spending. A tax advisor can help you figure out what deductions will make the most sense for you.
Home Equity Loan Alternatives
Home equity loans are one way to leverage your home’s value, but you might also decide to consider a home equity line of credit (HELOC) or a cash-out refinance. Here’s some information on those types of loans.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is similar to a credit card. It offers homeowners freedom to borrow and pay interest only on what they use, up to a set limit. Usually, during an initial “draw” period, they can withdraw funds. This is followed by a repayment period, in which they pay back the principal and the remaining interest. Rates on HELOCs are generally adjustable.
Unlike a home equity loan, a HELOC is flexible by design. But bear in mind that with adjustable interest rates, payments can fluctuate, and that could impact your costs down the line.
Qualifying for a HELOC will likely require a credit score of 680 and a DTI ratio that is under 50%. HELOCs will often permit you to borrow up to 90% of the home equity you have accrued. Check out a HELOC repayment payment calculator to help you see what your payments would look like as you pay down the loan.
Want to calculate the interest you’d have to pay during the HELOC “draw” period? Try out a HELOC interest-only calculator.
Cash-Out Refinance
A cash-out refinance is a strategic mortgage refinance. With this loan, you swap your original mortgage for one that’s larger than what you owe now, and then take the difference as a lump sum. Cash-out refi rates may be fixed or adjustable.
When evaluating the benefits of a cash-out refinance vs. a home equity liine of credit, it’s worth noting that meeting the qualifications for a cash-out refi is usually easier than for a home equity loan or a HELOC. Lenders’ standards vary, but cash-out refinances tend to require a 630 minimum credit score and a 43% or lower DTI ratio.
The Takeaway
To get access to Dayton’s best home equity loan rates, you’ll want to build your credit, manage your debt-to-income ratio, and secure reliable property insurance on your home. You can use online tools to help you estimate your payments and the amount you can borrow, but be sure you factor in closing costs and other expenses as you make your decision.
If a home equity loan doesn’t feel quite right, a HELOC or a cash-out refinance might be an option. Weigh all the benefits and risks. The goal is to find the financing that furthers your financial goals and best suits your needs.
SoFi now offers home equity loans. Access up to 85%, or $750,000, 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.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What are common uses of home equity loan funds?
People often apply for home equity loans to fund home improvements and to consolidate high-interest debt, although there are lots of occasions when it can be helpful to draw equity from your home. If you decide to pursue a home equity loan, remember to use the funds wisely and make sure the loan fits with your overall financial situation.
What do monthly payments look like on a $50,000 loan?
Your monthly payment on a $50,000 home equity loan will depend on factors like your interest rate and the loan term. Here’s an example: If your loan had a 7.00% interest rate and a term of 15 years, your monthly payment would be about $449. At a 9.00% interest rate over 15 years, the payment would be around $507. Experiment with a loan calculator to figure out what your monthly payments would be with different variables inserted.
What would a monthly payment be on a $100,000 HELOC?
In all likelihood, a $100,000 home equity line of credit would come with a variable interest rate. During the draw period, you would probably need to pay interest only, based on the funds you pull out. When the draw period closes, you’d begin to repay both the principal and interest. If you repaid the full $100,000 over 20 years, and the interest rate held at 8.00%, you’d have an $836 monthly payment. But a variable rate makes predicting payments down the line harder.
What are a home equity loan’s biggest benefits?
Home equity loans offer fixed interest rates, so the monthly payment on yours should stay stable and predictable. Since a home equity loan is secured by your home, it will typically come with a lower interest rate than an unsecured personal loan. The interest you pay on a home equity loan may be tax-deductible if you’re borrowing funds to pay for home renovations or upgrades (consult a tax advisor to know for sure).
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q324-338
More home equity resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Current Home Equity Loan Rates in St. Petersburg, FL Today
ST. PETERSBURG HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in St. Petersburg, FL.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in St. Petersburg.
Key Points
• Home equity loan rates tend to follow the prime rate, but also take cues from the borrower’s financial position.
• If you’re set on going for the best rates out there, try to keep your credit score at 700 or above and your debt-to-income ratio below 36%.
• Home equity loans usually offer fixed monthly payments over a term of 5 to 30 years, typically with interest rates that are lower than unsecured loans.
• The risk of foreclosure should be a serious consideration if you are thinking about taking out a home equity loan.
• The interest on your home equity loan may be tax-deductible if funds are used for home improvements.
Introduction to Home Equity Loan Rates
You’ve found our guide to home equity loan rates in St. Petersburg, Florida. Welcome to our deep dive into home equity loans, where we’ll explain how they work, what factors influence the interest rates they carry, and how you can qualify for the very best rates. Whether you are looking to pay for improvements to your home, consolidate high-interest debt, or cover another major expense, getting an understanding of home equity loan interest rates can help you make the most informed financial decisions.
How Do Home Equity Loans Work?
Before you decide to apply, you should know the basics about what a home equity loan is. It’s a second mortgage with your home as the collateral. Most home equity loans have a fixed interest rate, and therefore payments that are stable and predictable.
A home equity loan provides a lump sum of money you can use for any purpose. You’ll begin repaying it immediately, in monthly installments over a fixed term of five to 30 years. Because your home will secure the loan, you’ll generally get a lower interest rate than you would with an unsecured personal loan. (Keep in mind that this means your home will also be at risk if you miss payments.)
To qualify, you’ll need to have at least 20% equity in your home. Some lenders may allow you to borrow up to 85% of your equity. A home equity loan calculator can help you determine your home equity and how much you might be able to borrow against it.
Where Do Home Equity Loan Interest Rates Originate?
Interest rates on different types of home equity loans are influenced by both the economic environment and your own financial situation. Federal Reserve policy — specifically changes to the federal funds rate — can send ripples through the lending market, impacting the prime rate. When the prime rate moves up or down, so do home equity loan rates.
As was the case when you qualified for your original home loan in St. Petersburg, your credit score and debt-to-income (DTI) ratio will drive the rates that lenders offer you. The loan amount and repayment term will influence the interest rate you get, too. Competitive pressures among lenders also tend to lead to rate reductions.
Understanding these factors will help you make informed decisions when you look at options for how to get equity out of your home.
How Interest Rates Impact Home Equity Loan Affordability
Your interest rate can truly be a game-changer when it comes to your loan’s long-term affordability. Let’s say you get a $100,000 home equity loan with a 15-year repayment term. At an 8.50% interest rate, you have a $984 monthly payment and pay $77,253 in total interest by the time the loan closes. Bump the interest rate up to 9.50%, and you’ll be looking at a $1,044 monthly payment and $87,961 in total interest. You’ll give your lender $10,700 in additional interest for a one-percentage-point rate difference!
Here are more examples of how your loan rate and term could affect your payments:
| Loan Amount | Loan Term | Interest Rate | Monthly Payment |
|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 |
| 7.00% | $775 | ||
| 10 years | 8.00% | $1,213 | |
| 7.00% | $1,161 | ||
| $50,000 | 20 years | 8.00% | $418 |
| 7.00% | $388 | ||
| 10 years | 8.00% | $607 | |
| 7.00% | $581 | ||
| $25,000 | 20 years | 8.00% | $209 |
| 7.00% | $194 | ||
| 10 years | 8.00% | $303 | |
| 7.00% | $290 |
Home Equity Loan Rate Trends
As you give thought to how to tap your home equity, you’ll probably find yourself considering how to time your loan application so you can secure the lowest possible rate. Predicting the prime rate is a bit like forecasting the weekend weather, though — you could be wrong, or it could just turn on a dime.
Don’t beat yourself up if you can’t hold off on applying until rates are at their lowest. If you need a loan, focus on comparing offers from different lenders to find the best possible rate out there.
How Much Does the Prime Rate Fluctuate?
The answer is, quite a lot, when you look at its movement over decades. The prime rate has seen its fair share of ups and downs, as you can see from the graphic and chart. It is not always predictable, and a drop is not necessarily in the near future at any given moment.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
How Can You Qualify for the Lowest Rates
Take a few steps before beginning the application process, and without a doubt, you’ll be better positioned to land a home equity loan with rates and terms that are manageable and beneficial. Here’s what you need to do.
Maintain Sufficient Home Equity
You’ll need to have at least 20% equity in your home to qualify for a home equity loan. You can calculate what you’ve got with a simple equation. Simply subtract your outstanding mortgage balance from the estimated value of your home, and then divide the answer by your home’s estimated value. You’ll arrive at the percentage of equity you now possess. A higher percentage is always better in this case.
Build a Strong Credit Score
An iron-clad credit score is also a key to landing the best home equity loan rate. Lenders look for a score of 680 or higher, and many require one above 700. The higher your credit score, the more easily you’ll find it to access favorable loan terms. To improve your score, focus on making timely payments on your bills, reducing credit card balances, and steering clear of new debt. Your chances of qualifying for a home equity loan with a favorable interest rate will increase.
Manage Debt-to-Income Ratio
Another important factor to tune in on and try to improve is your DTI ratio. Lenders typically prefer to see a DTI ratio of 50% or less, and they really love one that’s 36% or lower. Managing your DTI effectively can help you qualify for lower interest rates, so work on paying down your existing debt, increasing your income, or both.
Obtain Adequate Property Insurance
Insurance on your property is a must-have if you want to qualify for a home equity loan. This insurance safety-net will protect both you and your lender should damages to your home occur. Coverage needs to be active and adequate, so be sure to keep it up to date.
Tools & Calculators
Online tools and calculators can be a big help when you’re looking for the best home equity loan rates. Choose among multiple tools, including a home equity loan calculator, which lets you figure out how much loan you are likely to qualify for.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
The closing costs on home equity loans are something you need to know about and factor in. As a borrower, you’re looking at paying 2% to 5% of the loan amount at closing. This table shows how typical loan closing costs tend to break down.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document preparation | $100-$500 (may be billed on an hourly basis if attorney involvement is required, or built into the loan origination fee) |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
Some lenders offer no-closing-cost loans, but these are known to frequently come with higher interest rates, which will be part of your life for the duration of your loan term.
Tax Deductions on Home Equity Loan Interest
The interest you’ll pay on your home equity loan in St. Petersburg may be tax-deductible if your plan is to use the funds to make improvements on your home. Single filers are able to take deductions on the interest they pay on the first $375,000 of loan debt. Married couples who file jointly can deduct the interest on up to $750,000 of debt. Know that you’ll need to itemize if you want to take advantage of these deductions. A tax advisor can help you with more information.
Home Equity Loan Alternatives
Not sold on a home equity loan? You could consider a home equity line of credit, or HELOC vs. a home equity loan, as one option. Another choice would be a cash-out refinance.
With a cash-out refinance, you take out a new mortgage for a larger sum than what you already owe on your home loan, then receive the difference as a lump sum. You can use it however you wish. A HELOC works a bit differently. You apply for a credit limit, secured by your home, that you can borrow against as you need the money. You’ll only pay interest on the cash you draw out.
You may want to learn even more about a cash-out refinance vs. home equity line of credit. The two products have similarities and differences. It’s good to know what they are, so you can understand your options and make the best choice.
Cash-Out Refinance
This option could also be called a strategic . When you do it, you swap your original mortgage for a larger one. Then you receive the difference in a lump sum.
Rates on cash-out refis may be fixed or adjustable, and it tends to be easier to qualify for a cash-out refi than it does for a home equity loan or a HELOC. Lenders’ standards vary, but cash-out refis often require a 620 minimum credit score and a DTI ratio of 43% or less.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC works a lot like a credit card does. It’s a loan, but it can offer a homeowner the freedom to borrow up to a set limit, and pay interest on the money just when they use it. You can usually pull out funds during an initial “draw” period, followed by a repayment period when you’ll have to repay not only the interest, but the principal.
Rates on HELOCs are most often adjustable. Unlike home equity loans, HELOCs are about flexibility, but keep in mind that adjustable interest rates mean your rate and payments may change, potentially impacting your costs later Qualifying for a HELOC usually requires a credit score of 680 or higher (700-plus is even better) and a DTI ratio below 50% (aim for below 36% for the win). With a HELOC, you can often borrow up to 90% of your accrued home equity.
Wondering what your monthly payment would be on a hypothetical HELOC? Try running the variables through a HELOC monthly payment calculator. When you play around with different interest rates and terms, you’ll find out how they might affect your payments, and ultimately how much of a loan you can afford. If you just want to calculate how much interest you’d pay during the HELOC’s “draw” period, try a HELOC interest-only calculator.
The Takeaway
To get the best home equity loan rates in St. Petersburg, you’ll want to take good care of your credit score, manage your DTI ratio, and obtain thorough property insurance coverage. When you compare offers from multiple lenders, be sure to consider closing costs and fees as well as interest rates. Taking the time to think about these factors can help you make the best decision for your finances.
SoFi now offers home equity loans. Access up to 85%, or $750,000, 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.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What are common reasons to go for a home equity loan?
A home equity loan is a versatile tool. Some popular reasons people apply for them are to finance major expenses like home improvements, or to consolidate high-interest debt. You will want to plan well to use the funds wisely, and also make sure the loan — and the cost of it — fits into your long-term financial goals.
What will monthly payments look like on a $50,000 loan?
A monthly payment on a $50,000 home equity loan will heavily depend on both your interest rate and loan term. Get your loan at a 7.00% interest with a 15-year term, and your monthly payment will be around $449. At a 9.00% rate over 15 years, the payment would be about $507. A loan calculator can help you figure out monthly payments using other variables, so you can compare payments with whatever terms you are considering.
What might stop you from getting a home equity loan?
A few factors could interfere with your efforts to secure a home equity loan. First, lenders typically require a minimum credit score of 680. If yours is lower, it could disqualify you. A high debt-to-income (DTI) ratio – usually above 50% – might jeopardize your loan, too. If you’ve got less than 20% home equity, that could pose a red flag to lenders. They will most likely look at how stable your home’s value is and how comprehensive a property insurance plan you are carrying. These are all common disqualifiers, although requirements vary from lender to lender.
What benefits do home equity loans offer?
Home equity loans often come with fixed interest rates. This means they have predictable monthly payments, and these make budgeting easier. Since they often have lower rates than unsecured personal loans, they are cost effective for significant one-time expenses like consolidations of high-interest debt or home improvement costs. But be sure to look at these benefits next to the potential risks, like the threat of foreclosure if you can’t make your payments.
SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.
All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL-Q324-336
More home equity resources.
-
What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Current Home Equity Loan Rates in Salem, OR Today
SALEM HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Salem, OR.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Salem.
Key Points
• Home equity loan rates are determined by your credit score, your debt-to-income ratio, and other factors.
• To land the best rates available, you’ll want to aim for a credit score of about 700 and a debt-to-income (DTI) ratio under 36%.
• The rates lenders may offer you are impacted by your personal financial profile as well as the prime rate and Federal Reserve policy.
• Even a tiny difference in home equity loan rates have potential to add up to substantial savings over the life of the loan.
• Home equity loan interest could be tax-deductible if you’re using the money to fund home improvements.
• Alternative options, like HELOCs and cash-out refinances, come with their own perks and pitfalls.
Introduction to Home Equity Loan Rates
Welcome to our guide to home equity loan rates in Salem, Oregon. We’ll dive deep into home equity loans and explain how they work, what factors influence their interest rates, and how you can qualify for the best rates around. It doesn’t matter whether you’re looking to fund improvements to your property, consolidate accumulated debt, or take care of another big expense. Understanding home equity loan interest rates can help you make good decisions.
How Do Home Equity Loans Work?
Before applying, you should peruse a primer on what a home equity loan is. It’s a second mortgage using your home as collateral, giving you a lump sum of money to use for any purpose. You will begin to repay it immediately in equal monthly installments over a fixed term between five and 30 years. Because your home secures the loan, you generally get a lower interest rate than you would with an unsecured personal loan. (This means your home is at risk if you miss payments, so keep that in mind.) Most home equity loans have a fixed interest rate, making payments predictable.
To qualify, you’ll need at least 20% accrued equity in your home. Some lenders might allow you to borrow 85% of that equity, but that’s usually the maximum. A home equity loan calculator can help you figure out your home equity and how much you might be able to borrow.
Where Do Home Equity Loan Interest Rates Originate?
Interst rates on different types of home equity loans are often influenced by both the economic environment and your financial situation. Federal Reserve policy — for instance, changes to the federal funds rate — can send vibrations through the lending market that ultimately impact the prime rate. When the prime rate moves up or down, home equity loan rates do, too.
As was the case when you applied for your original home loan, your credit score and debt-to-income (DTI) ratio will drive the rates you’re offered. The loan amount and repayment term affect your interest rate, too. Competition among lenders can also lead to rate reductions.
Understand these factors and you will be prepared to make informed decisions when you look at options for how to get equity out of your home.
How Interest Rates Impact the Affordability of Your Home Equity Loan
That little interest rate can be a real game-changer when it comes to the cost of a loan in the long term. Let’s say you secure a $100,000 home equity loan with a 15-year term. At an 8.50% interest rate, you’d have a $984 monthly payment and pay $77,253 in interest by the time you pay it off. Bump the interest rate up to 9.50%, and you’ll be looking at a $1,044 monthly payment and $87,961 in total interest. That’s $10,700 in additional interest for a one-percentage-point rate difference!
Here are more examples of how your term and interest rate could affect the long-term affordability of your loan:
| Loan Amount | Loan Term | Interest Rate | Monthly Payment |
|---|---|---|---|
| $100,000 | 20 years | 8.00% | $836 |
| 7.00% | $775 | ||
| 10 years | 8.00% | $1,213 | |
| 7.00% | $1,161 | ||
| $50,000 | 20 years | 8.00% | $418 |
| 7.00% | $388 | ||
| 10 years | 8.00% | $607 | |
| 7.00% | $581 | ||
| $25,000 | 20 years | 8.00% | $209 |
| 7.00% | $194 | ||
| 10 years | 8.00% | $303 | |
| 7.00% | $290 |
Home Equity Loan Rate Trends
Thinking about how to tap your home equity, you’ll probably consider how you can time your loan application. Is there a perfect moment to move so you can achieve the lowest possible rate? Unfortunately, predicting the prime rate is like trying to forecast the weather — not every borrower has that kind of intuition, or the time to wait for a desirable turn.
If you can’t hold off on applying until rates are at their lowest, don’t beat yourself up. If a loan is what you need, start comparing offers from different lenders so you can get the best possible rate.
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
How Much Does the Prime Rate Move?
The answer is, a lot — when you look at its fluctuations over several decades. The prime rate has seen ups and downs, as you can see from the graphic and the chart. But it’s not particularly predictable, and a plunge in the near future is hard to see coming.
How Can You Qualify for the Lowest Rates?
To secure the most competitive home equity loan rates in Salem, keep a few factors in mind and take the following steps before you begin the application process. You’ll be better positioned to land a home equity loan with a favorable, and hopefully manageable, rate and term.
Maintain Sufficient Home Equity
This is a pretty easy equation: 20% or more equity in your home will generally qualify you for a home equity loan. To figure out how much equity you’ve got, subtract your outstanding mortgage balance from the estimated value of your home, then divide your answer by the estimated home value. You’ll arrive at your percentage of equity. The higher, the better.
Build a Strong Credit Score
A good credit score is needed to get the best available rate. Home equity loan lenders often look for a 680 or higher score, and many may require a score above 700. Higher credit scores signal financial savvy. They tend to open doors to favorable loan offerings. Focus on making payments on time, reducing credit card balances, and avoiding new debt to increase your chances of qualifying for a home equity loan with a lower interest rate.
Manage Debt-to-Income Ratio
DTI ratio is an important factor when it comes to your chances of qualifying for a home equity loan and getting a low rate. Lenders typically want to confirm a borrower’s DTI ratio at 50% or less, and 36% or lower can bring the very best interest rates. Make efforts to manage your DTI effectively. That means, work on paying down your existing debt, increasing your income, or achieving a combination of these things.
Secure a Good Property Insurance Policy
Insurance on your property is a must-have for a home equity loan. The homeowners’ insurance safety-net protects both you and the lender should you encounter damages. Make sure your coverage is both active and adequate.
Useful Tools & Calculators
Before taking steps to borrow against your home, you might want to do some math. Specialized calculators can help you understand what borrowing options are available to you, and how much you might need to spend on loan payments. A home equity loan calculator and other online calculators can make that math a cinch for you. Here are a few useful ones.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
When it comes to the closing costs on your home equity loan, you’ll end up paying a ballpark figure of 2% to 5% of the loan amount. This table shows some typical closing costs that borrowers encounter, and the amounts they may pay for them.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document prep | $100-$500 |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
Sometimes lenders offer no-closing-cost loans, but these frequently come with higher rates. Don’t forget to calculate what you’ll pay over the loan’s life before you sign up.
Tax Deductibility of Home Equity Loan Interest
Interest you pay on a home equity loan may be tax-deductible, but usually only if you put the funds toward improving your home. Single filers can deduct interest on their first $375,000 in loan debt. Married couples who file jointly can deduct interest on as much as $750,000 in debt. You’ll need to itemize on your tax return, though — save your receipts and invoices to take advantage of this option. A tax advisor can help you figure out what makes sense for you.
Home Equity Loan Alternatives
A home equity loan isn’t the only way to leverage the value of your property. You can consider a cash-out refinance or a home equity line of credit (HELOC) as well. With a cash-out refi, you take out a new mortgage for a larger amount than what you owe on your home loan now. The difference comes to you as a lump sum, and you use it as you wish. With a HELOC, you apply for a credit limit, secured by your home, that you then can borrow against as needed and pay interest only on the cash you draw out.
You can learn more about cash-out refinance vs. hoem equity line of credit similarities and differences so you can understand the options and make the best choice.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is a lot like a credit card, in that it offers homeowners freedom to borrow up to a set limit, and then pay interest only on what they use. Usually, you can pull out funds during an initial “draw” period, followed by a repayment period when you must repay both the principal and the interest.
The rates on a HELOC are generally adjustable. Unlike a home equity loan, a HELOC is about flexibility. But keep in mind that adjustable interest rates mean your rate and payments can fluctuate, potentially impacting your costs later.
What are the similarities when it comes to a HELOC vs. a home equity loan? Qualifying for a HELOC also likely requires a credit score of 680 or higher (700-plus is even better) and a DTI ratio below 50% (below 36% is best). With a HELOC, you may be able to borrow a bit more — up to 90% of your accrued home equity.
Curious about how much the monthly payments would be on your hypothetical HELOC? Try running figures through a HELOC repayment calculator. You can plug in different interest rates and terms to find out how they would affect your payments, and just how much of a loan you can afford. And if you’d like to calculate how much interest you’d have to pay during the HELOC “draw” period, try out a HELOC interest-only calculator.
Cash-Out Refinance
A cash-out refinance is a strategic mortgage refinance. Swapping your original mortgage for one that’s larger than the amount you owe, you then receive the difference as a lump sum. Cash-out refi interest rates may be fixed or adjustable. Lenders have different standards, but often cash-out refis require a 620 minimum credit score and a DTI ratio that is 43% or less.
Keep in mind that it’s usually easier to qualify for a cash-out refi than it is for a home equity loan or a HELOC.
The Takeaway
If you’re considering applying for a home equity loan in Salem, developing an understanding of interest rates will help you navigate the process and negotiate the best available terms. Your credit score, DTI ratio, and equity level will all play a role. Just shopping around can go a long way as you try to get yourself the best rate possible. And if a home equity loan isn’t a fit, a HELOC or a cash-out refinance will have its own advantages.
SoFi now offers home equity loans. Access up to 85%, or $750,000, 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.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What are the common uses for a home equity loan?
A home equity loan is a versatile and useful tool, and many people use them to borrow cash to finance major expenses, pay for home improvements, or consolidate their high-interest debt. You’ll want to use the funds wisely and consider how the loan fits into your bigger financial picture.
What will the monthly payments look like on a $50,000 loan?
Your payment on a $50,000 home equity loan each month is going to depend on both the interest rate and the loan term. Note that if you got your loan at a 7.00% interest rate over 15 years, your monthly payment would be about $449. At a 9.00% rate over 15 years, the payment would be close to $507. A loan calculator will help you figure out monthly payments easily, whatever the variables and terms.
What could cause you to be disqualified from getting a home equity loan?
A number of factors could get in your way when you try to secure a home equity loan. First would be if you don’t have the minimum credit score of around 680 that lenders typically require. A high debt-to-income (DTI) ratio -– usually above 50% -– might get in the way of your loan, too. If you’ve got less than 20% equity in your home, that could put off lenders, as could signs that your home’s value is unstable or that your property insurance plan is insufficient. Qualifications vary by lender, but these are common dealbreakers for borrowers.
What are some of the benefits of a home equity loan?
Home equity loans often have fixed interest rates, and therefore predictable monthly payments, which can make budgeting easier. They usually have lower rates than unsecured personal loans, and that makes them cost effective for one-time, significant expenses such as home improvements or high-interest debt consolidation. You should always balance benefits like these with the potential risks, including the threat of foreclosure if you happen to fall behind on payments.
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All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
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SOHL-Q225-335
More home equity resources.
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What is a Home Equity Line of Credit
-
Different Types of Home Equity Loans
-
HELOC vs Home Equity Loan: How They Compare
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Current Home Equity Loan Rates in Riverside, CA Today
RIVERSIDE HOME EQUITY LOAN RATES TODAY
Current home equity loan
rates in Riverside, CA.
Disclaimer: The prime rate directly influences the rates on HELOCs and home equity loans.
Turn your home equity into cash. Call us for a complimentary consultation or get prequalified online.
Compare home equity loan rates in Riverside.
Key Points
• Home equity loan rates are shaped by the Federal Reserve’s monetary policy, as well as the borrower’s creditworthiness.
• A smart borrower will make efforts to compare rates from multiple lenders. Doing this will help you find the best deal and terms.
• By working to boost your credit score and to reduce your debt-to-income (DTI) ratio, you could see the rates you’re offered drop.
• You will need to have built at least 20% equity in your home in order to qualify for a home equity loan.
• Choose fixed rates for predictable monthly payments, or adjustable rates for flexibility.
• Interest on home equity loans might be tax-deductible if you use the funds to pay for home-related expenses.
Introduction to Home Equity Loan Rates
What is a home equity loan? First — and most important — it’s a way for homeowners to access the value they’ve built in their homes. It’s also an option many people who’ve built home equity use to relieve pressure when they’re in need of cash.
In this article, we’ll cover all you should know about home equity loans. We will discuss factors that affect loan rates and give you tips for getting the best rate possible on your loan. We’ll explain different types of home equity loans, including home equity lines of credit (HELOCs) and cash-out refinances, so you can be aware of available alternatives, and know the pros and cons of each.
Whether you are envisioning a home renovation, working to consolidate high-interest debt, or preparing to make a major purchase, understanding home equity loan rates in Riverside can help you make the smartest financial decisions for your own economic situation.
How Do Home Equity Loans Function?
A home equity loan is a second mortgage — assuming you are still paying off your original mortgage. It allows you to tap into your home’s equity and receive a lump sum of cash, which you’ll need to immediately begin repaying, usually in fixed monthly installments, over the next five to 30 years. The loan is secured by your home, and that means you’ll have access to lower interest rates than you could negotiate with an unsecured personal loan.
One important thing to keep in mind: In order to draw on the equity in your home, you have to actually have equity in your home. You can still be working on paying off your mortgage, but the money you owe now shouldn’t exceed what the house is worth. Typically, lenders will want you to have 20% equity in your home at a minimum in order to qualify.
HELOCs vs. Home Equity Loans
A HELOC vs. a home equity loan is where many homeowners begin their comparisons. These two types of loans are similar in that you use them to pull equity from your home. A home equity loan’s interest rate is often fixed, giving you the peace of mind that comes with predictable payments, while a HELOC’s rate will often be adjustable.
| HELOC | Home Equity Loan | |
|---|---|---|
| Type | Revolving line of credit | Installment loan |
| Interest Rate | Usually variable-rate | Usually fixed-rate |
| Repayment | Repay only what you borrow plus interest; you may have the option to make interest-only payments during the draw period. | Starts immediately at a set monthly payment |
| Disbursement | Charge only the amount you need | Lump sum |
If you’ve been seriously paying down your mortgage and are wondering how to get equity out of your home, a home equity loan could be the right option for you.
Where Do Home Equity Loan Interest Rates Come From?
The rates you may be offered when you shop for a home equity loan are a product of many different influences, from the broad economic landscape to your personal financial standing.
Federal Reserve policy — including changes to the federal funds rate — can send ripples through the lending market, causing changes that impact the prime rate. When the prime rate moves up or down, so do home equity loan rates. If you keep an eye on these factors, you’ll be better prepared to anticipate rate shifts and make confident decisions about when to pursue a home equity loan.
On a personal level, your credit score and DTI ratio are key drivers in the rates you’ll be quoted, too, when you shop around as a potential borrower. You’ll actually have more control over these things, so try to be prepared. You’ll have a better outcome applying for a home equity loan if you’ve spent time and effort working to improve them.
How Interest Rates Impact Home Equity Loan Affordability
The interest rate on your home equity loan can make a world of difference in how affordable it will be over time, as you pay it down. What should you know? Even a seemingly small reduction in the rate — even a half of a percentage point matters — can lead to significant savings, or extra costs if we are talking about a rate increase.
To demonstrate just how much an interest rate can impact your loan costs, the chart below shows both monthly payment amounts and total interest on a $75,000 home equity loan with a 20-year repayment term. We’ve calculated both the monthly payment and the total interest you would pay at several rates.
With an 8.00% interest rate, your monthly payment would be approximately $627 and the total interest over the loan’s term would add up to $75,559. If the interest rate was one percentage point lower, at 7.00%, the monthly payment would be about $581, and interest would total $64,554. That means, the lower rate could save you $11,005 in interest.
| Interest Rate | Monthly Payment | Total Interest Paid |
|---|---|---|
| 8.00% | $627 | $75,559 |
| 7.50% | $604 | $70,007 |
| 7.00% | $581 | $64,554 |
Fixed vs Adjustable Interest Rates
Home equity loans tend to come with fixed interest rates. But some Riverside lenders may offer adjustable rates, too, and different home equity financing like home equity lines of credit (HELOCs) and cash-out refinances, also offer adjustable rates. That’s why it’s a good idea to consider which you prefer.
A fixed rate never changes through the loan’s life, giving you the assurance of consistent monthly payments as you pay it off. Such predictability is a great tool for budgeting and financial planning.
Adjustable rates often start off slightly lower than fixed rates, but after an initial period, they tend to change in accordance with market rates. This can lead to higher payments and create uncertainty about what to expect over the loan term.
When you think about home equity loan rates, it’s smart to consider the merits of fixed versus adjustable rates. The type of rate you choose should take into account your financial standing and your comfort with risk.
Home Equity Loan Rate Trends
Predicting interest rate movement is like a day at the races – it’s all but impossible to know what will happen with certainty. But looking at trends in recent history can give you a better sense of movement that may be coming.
Let’s look at the prime rate, a pivotal driver of home equity loan rates. Its recent timeline shows just how changeable it is. As you can see in the chart below, it dropped to 3.25% in 2020, then steadily rose to 8.50% in 2023.
Historical Prime Interest Rates
Source: TradingView.com
| Date | Prime Rate |
|---|---|
| 9/19/2024 | 8.00% |
| 7/27/2023 | 8.50% |
| 5/4/2023 | 8.25% |
| 3/23/2023 | 8.00% |
| 2/2/2023 | 7.75% |
| 12/15/2022 | 7.50% |
| 11/3/2022 | 7.00% |
| 9/22/2022 | 6.25% |
| 7/28/2022 | 5.50% |
| 6/16/2022 | 4.75% |
| 5/5/2022 | 4.00% |
| 3/17/2022 | 3.50% |
| 3/16/2020 | 3.25% |
| 3/4/2020 | 4.25% |
| 10/31/2019 | 4.75% |
| 9/19/2019 | 5.00% |
| 8/1/2019 | 5.25% |
| 12/20/2018 | 5.50% |
| 9/27/2018 | 5.25% |
Source: St. Louis Fed
As we’ve mentioned, fluctuations of this sort impact the rates you might encounter in Riverside. But staying in the know about financial trends and working on your financial standing can help you time your application to sync with favorable economic conditions, despite some unpredictability. With luck, you can score competitive rates.
How to Qualify for the Lowest Rates
To grab the most competitive home equity loan rates offered by lenders in Riverside, you’ll want to keep in mind a few factors. Take the following steps before you begin the application process, and you’ll position yourself to land an interest rate and term that are favorable and manageable.
Accrue Home Equity
To qualify for a home equity loan, you’ll need to have at least 20% equity in your home. You can figure out your equity, like this: Subtract the outstanding balance on your mortgage from the estimated value of your home, then divide the answer by your home’s estimated value to arrive at a percentage of equity. The higher that percentage is, the better off you are.
Build a Strong Credit Score
To land the best home equity loan rates, you also need a robust credit score. Lenders often look for a score of 680 or higher — and many require a score over 700. A higher score is viewed by lenders as a sign of financial competence, and can open the door to favorable loan terms. If you make timely payments, reduce credit card balances, and steer clear of new debt, you may boost both your credit score and your chance of qualifying for a home equity loan with a lower interest rate.
Manage Debt-to-Income Ratio
Your DTI ratio is important when it comes to qualifying for a home equity loan and getting a great rate. Lenders typically would like to see a DTI ratio of 50% or less. If yours is 36% or lower, you might qualify for lower interest rates. How can you manage your DTI effectively in Riverside? Make efforts to pay down your debt, increase your income, or achieve some combination of the two.
Get Adequate Property Insurance
Property insurance is a must-have if you want to qualify for a home equity loan. Insurance is a safety net for both you and the lender should your home suffer any kind of damages, so make sure your coverage is top-notch.
Tools & Calculators
Online tools and calculators can be a giant help when you’re looking for the best home equity loan rates. You can choose among multiple tools, like a home equity loan calculator, which letsyou input a few details and get a calculation of the maximum home equity loan amount you might be able to qualify for.
Run the numbers on your home equity loan.
-
Home Equity Loan Calculator
Enter a few details about your home loan and we’ll provide you your maximum home equity loan amount.
-
HELOC Payment Calculator
Punch in your HELOC amount and we’ll estimate your monthly payment amount for your HELOC.
-
HELOC Interest Only Calculator
Use SoFI’s HELOC interest calculator to estimate how much monthly interest you’ll pay .
Using the free calculators is for informational purposes only, does not constitute an offer to receive a loan, and will not solicit a loan offer. Any payments shown depend on the accuracy of the information provided.
Closing Costs and Fees
If you are curious about the closing costs you’d have to pay on a home equity loan, you’re looking at paying 2% to 5% of the loan amount. This table will show you how loan closing costs tend to break down.
| Service | Typical Fees |
|---|---|
| Appraisal | $300-$500 |
| Credit report | $30-$50 or more |
| Document preparation | $100-$500 (may be billed on an hourly basis if attorney involvement is required, or built into the loan origination fee) |
| Loan origination | 0.5%-1.0% of the loan amount |
| Notary | $20-$100 |
| Title insurance | 0.5%-1.0% of the loan amount |
| Title search | $75-$250 or more |
Some lenders may offer a product called a no-closing-cost loan, but look closely at the details. These are known to frequently come with higher interest rates.
Is Home Equity Loan Interest Tax-Deductible?
Yes, the interest on your home equity loan may be tax-deductible. This is generally the case if you use the funds to make improvements on your home. Single filers can take deductions on the interest they pay on the first $375,000 of loan debt. Married couples filing jointly can deduct the interest on up to $750,000 of debt. You’ll need to itemize if you want to take advantage of these deductions, though, so be prepared. A tax advisor can help you figure out what will make sense for you.
Home Equity Loan Alternatives
If you’re not sure that a home equity loan is what you’re looking for, you could also consider a cash-out refinance or a home equity line of credit (HELOC). A cash-out refinance lets you take out a new mortgage for a larger sum than what you owe on your existing home loan, and receive the difference as a lump sum to use as you wish. A HELOC lets you apply for a credit limit, secured by your home, that you can borrow against as you need to. You’ll only pay interest on the cash you draw out, once you’re received it.
You may want to learn more about cash-out refinance vs. home equity line of credit similarities and differences. A strong understanding of your options will help you make the best choice.
Cash-Out Refinance
This option could also be called a strategic mortgage refinance. When you do it, you swap your original mortgage for a larger one and receive the difference in a lump sum. Rates on cash-out refis may be fixed or adjustable. It may be easier to qualify for a cash-out refi than it is for a home equity loan or a HELOC. Lenders’ standards always vary, but often, cash-out refis require a 620 minimum credit score and a DTI ratio of 43% or lower.
Home Equity Line of Credit (HELOC)
What is a home equity line of credit? A HELOC is a lot like a credit card secured by your home. It can offer you the freedom to borrow up to a set limit, and then pay interest on the money only when you use it. You pull out funds during an initial “draw” period, followed by a repayment period when you need to pay back both the principal and the interest.
Rates on HELOCs are usually adjustable, and HELOCs are all about flexibility. But keep in mind that adjustable interest rates mean your rate and payments could change and potentially impact your costs in the future. Qualifying for a HELOC often requires a credit score of 680 or higher (700-plus is even better) and a DTI ratio below 50% (come in under 36% for the best rates). With a HELOC, you may be able to borrow up to 90% of your home equity.
Want to know how much your monthly payment would be on HELOC? Experiment with figures using a HELOC monthly payment calculator. Play around with different interest rates and terms to find out how they’ll affect your payments, and ultimately how much of a loan you can afford. If you just want to calculate how much interest you’d pay during a HELOC’s draw period, try a HELOC interest-only calculator.
The Takeaway
Before you apply for a home equity loan in Riverside, make sure you understand how interest rates work — that will help you negotiate the best rate and term. Your credit score, DTI ratio, and equity level all play a role in the rate you’ll score, and shopping around to compare lenders’ offerings goes a long way.
A home equity loan isn’t a fit for you? A HELOC or a cash-out refinance could be a better option. Both have unique benefits that make them appealing.
SoFi now offers home equity loans. Access up to 85%, or $750,000, 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.
Unlock your home’s value with a home equity loan from SoFi.
FAQ
What are the common uses of a home equity loan?
There are lots of reasons why people apply for home equity loans. They include wanting to pay for home improvements and consolidating high-interest debt. If you decide you’re going to apply for a home equity loan, remember to use the funds wisely.
What would monthly payments look like on a $50,000 home equity loan?
Your monthly payment on a $50,000 home equity loan could vary depending on your interest rate and the loan term. If you got your loan at 7.00% interest over 15 years, for example, your monthly payment would be around $449. At a 9.00% interest rate over 15 years, the payment would be around $507. Check out the loan calculators in this article for help figuring out what monthly payments would be required of you, depending on the variables.
What prevents you from getting a home equity loan?
Several issues could get in the way when you apply for a home equity loan. First, lenders typically require a minimum credit score of around 680 or better; if your score is lower, it could disqualify you. A DTI ratio that’s above 50% is likely too high for a lender’s criteria, and might push your loan out of reach, too. Have less than 20% equity in your home? That could be a red flag for lenders, too. Lenders also look at your home value and its stability, along with how comprehensive your property insurance is. Qualifications vary, but these are common disqualifiers.
What are a home equity loan’s biggest benefits?
Home equity loans frequently carry fixed interest rates — and therefore have predictable monthly payments, making budgeting easier. They tend to have lower rates than unsecured personal loans, which makes them cost-effective for significant one-time expenses, including home improvements or debt consolidation. Be sure you balance these benefits with potential risks — including the threat of foreclosure on your home if you get behind on payments.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
²SoFi Bank, N.A. NMLS #696891 (Member FDIC), offers loans directly or we may assist you in obtaining a loan from SpringEQ, a state licensed lender, NMLS #1464945.All loan terms, fees, and rates may vary based upon your individual financial and personal circumstances and state.You should consider and discuss with your loan officer whether a Cash Out Refinance, Home Equity Loan or a Home Equity Line of Credit is appropriate. Please note that the SoFi member discount does not apply to Home Equity Loans or Lines of Credit not originated by SoFi Bank. Terms and conditions will apply. Before you apply, please note that not all products are offered in all states, and all loans are subject to eligibility restrictions and limitations, including requirements related to loan applicant’s credit, income, property, and a minimum loan amount. Lowest rates are reserved for the most creditworthy borrowers. Products, rates, benefits, terms, and conditions are subject to change without notice. Learn more at SoFi.com/eligibility-criteria. Information current as of 06/27/24.In the event SoFi serves as broker to Spring EQ for your loan, SoFi will be paid a fee.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .
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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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More home equity resources.
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What is a Home Equity Line of Credit
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Different Types of Home Equity Loans
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HELOC vs Home Equity Loan: How They Compare
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