Home Equity Loans

Access your home's equity with a Home Equity Line of Credit (HELOC) Mortgage for financial flexibility. Suitable for homeowners wanting to leverage their home's equity for major expenses or ongoing financial needs.

Here’s How a HELOC Loan Works

Revolving Line of Credit

A HELOC is a revolving line of credit, which means that the homeowner can take out money as many times as they need, as long as it's below their total loan amount. The homeowner can access the funds via check or a debit card during the draw period.

Flexible Use Cases

HELOCs can be used for any type of expense, with typical uses including home renovations, buying a second home or investment rental property, paying for college tuition, and paying off high-interest debt.

Variable Interest Rates

HELOCs have variable interest rates, which means that the interest rate can fluctuate depending on what's happening with the economy. This means that the monthly payments are adjustable and can fluctuate over the course of the loan.

Who qualifies for a HELOC loan?

HELOC loans are a type of loan that allows homeowners to access their home's equity through a revolving line of credit. To qualify for a HELOC, borrowers typically need to meet the following requirements:

  • Equity in the Home: Borrowers must have equity in their home, which is the difference between the home's value and the amount owed on the mortgage. Most lenders require borrowers to have at least 15% to 20% equity in their home.

  • Good Credit: Borrowers typically need a credit score of at least 620 to qualify for a HELOC, although a score in the mid-to-high 600s is preferred. Having good credit can also qualify borrowers for a better interest rate.

  • Low Debt-to-Income Ratio: Lenders typically require borrowers to have a debt-to-income ratio (DTI) of no higher than 43% to 50%, although some lenders might require lower ratios than this.

  • Sufficient Income: Borrowers must prove that they have enough income to qualify for a HELOC. They'll need to provide documentation that illustrates their employment and income information, such as W-2s, pay stubs, or tax returns.

  • Reliable Payment History: Lenders will review the borrower's payment history to determine if they're a risky investment. Borrowers must have a reliable payment history to qualify for a HELOC.

Let’s talk about your HELOC Options

becky.nexalo@gmail.com
Call or Text: 505-235-9810

Looking for other loan options?

FHA Home Loans

Make your home-buying dream a reality with an FHA loan, the go-to mortgage for many first-time buyers. Offering down payments as low as 3.5% and accepting credit scores starting at 580, it's a government-backed option with borrower-friendly terms.

Conventional Loans

Discover the advantages of conventional home loans, which are perfect for buyers with strong credit and financial stability. With the potential for no upfront mortgage insurance and favorable rates, these loans offer a traditional path to homeownership, requiring as little as 3% down for first-timers.

VA Home Loans

VA loans, insured by the Department of Veterans Affairs, are tailored to assist those who've served our country, offering benefits like no down payment and lower interest rates. These government loans are available to veterans, active service members, and some spouses, providing a more affordable route to homeownership without the burden of monthly mortgage insurance.

Jumbo Loans

For properties that surpass the conforming loan limits, jumbo loans are the solution, generally applicable to homes worth $750,000 and up. These non-conforming conventional mortgages are riskier for lenders, hence demand stronger financial profiles and higher credit scores. With down payments not less than 10.1%, they enable the purchase of high-priced homes, and a 20% down payment eliminates the need for PMI.

Reverse Mortgage

Reverse mortgages reverse the typical loan dynamic for those 62 and up, with lenders paying borrowers instead of collecting monthly payments. This arrangement not only clears any existing mortgages but also provides tax-free funds for any purpose, all while allowing homeowners to stay in their homes.

DSCR Loans

DSCR loans are ideal for investors focusing on income-producing properties, relying on the property's rental income to secure the loan. Lenders assess the Debt Service Coverage Ratio to ensure the rental income suffices for loan repayment. These loans require a robust credit score, a significant down payment, and offer a streamlined process without the need for income verification, providing a flexible and fast funding option for expanding property portfolios.

Feel Informed and Confident In Your Mortgage Decision

Get the information you need to feel happy with your mortgage choices. Find details about loan programs, qualifications, documents, strategies and more on our Mortgage Broker Blog.