Who Gets the Home Equity Loans with the Lowest Rates?

The lowest home equity loan rates are available to the most qualified borrowers. Qualified borrowers are those people with good credit scores, a high income and a low debt to asset ratio.

Credit Score

Credit scores are based on how well you have performed on loans in the past. As a home owner, the status of your current mortgage will have the greatest impact on your credit score of all your debts. Ensure your mortgage is in good standing and you have made all other payments on time for at least two years.

Income Requirements

Your future lender should be able to verify you can make your loan payments based on your income. You will need to provide proof of income from your employer. If you are applying jointly for the home equity loan with another person who owns your property, like a spouse, then you can combine both incomes in order to secure higher limits.

Debt to Asset Ratio

You should have relatively low debt in comparison to the asset base you have built in your home. Those borrowers who still owe the vast majority of their home's equity to their mortgage lender will not qualify for low home equity loan rates. Those with a lot of debt left on their mortgage will get higher interest rates.

blog comments powered by Disqus