Home equity loan eligibility secrets homeowners must know now
Key Eligibility Criteria
To qualify for a home equity loan, lenders typically require that you have a certain level of equity in your home, often at least 15-20%. This means that the combined loan-to-value (CLTV) ratio of your first mortgage and the home equity loan should not exceed 80-85% of your home's appraised value1. In addition to equity, lenders will assess your credit score, income, and debt-to-income (DTI) ratio. A credit score of 620 or higher is generally preferred, although some lenders may have more flexible criteria.