HELOC Requirements Experts Want You to Never Know

Home Equity and Loan-to-Value Ratio

The amount of equity in your home significantly influences your HELOC eligibility. Lenders commonly require that you have at least 15-20% equity in your home³. This is calculated using the loan-to-value (LTV) ratio, which compares your remaining mortgage balance with your home’s current market value. Generally, an LTV ratio of 80% or less is ideal for securing a HELOC.

Income Verification and Employment Stability

Lenders will assess your income to ensure you have the means to repay the HELOC. This involves providing documentation such as pay stubs, tax returns, and possibly employment verification. A stable employment history can further strengthen your application, as it indicates reliability and financial stability⁴.