Connect with us

Hi, what are you looking for?

Finance for Homeowners

How to Get a Home Equity Line of Credit (HELOC)

Before you secure a home equity line of credit, there are a few steps you need to take. Here’s the info you need to know for how to get a HELOC.

Have you heard a homeowner talk about how to get a HELOC to fund home improvements or put toward other major expenses? You may be curious about how to get a home equity line of credit or a home equity loan. A lender approves you to borrow up to a certain amount based primarily on your home equity and credit profile.  As long as you pay back what you use, you can draw from that pool of funds again and again.

The amount you can borrow through a HELOC will depend on the amount of equity you’ve built in your home. You can usually get approved for up to 80% of the value of your home, minus the balance that you owe on your mortgage.

A HELOC usually has lower interest rates than other options like personal loans or credit cards. This makes it an appealing option for borrowers who need to fund home renovations, cover unexpected expenses, or pay for big purchases.

How to get a home equity line of credit (HELOC)

How to Get a HELOC

If you’re looking at how to get a HELOC, your first step should be to take a look at your qualifications. What will lenders see when they look at your financial profile?

Qualifications for HELOC borrowers

Before a lender approves you for a HELOC, they’ll want to know that you can afford to pay it back. One of the key factors they’ll consider is your credit score, a three-digit number between 300-850 that serves as a major factor for evaluating your financial health. The higher the number, the more responsible a borrower you are considered to be.

Credit Score Expectations

Naturally, the stronger your credit score is, the more likely you are to be approved for a home equity line of credit and to secure a lower interest rate. A good credit score is typically considered to be a score of over 700. However, it’s still possible to get a HELOC with a range of credit scores–just talk to your lender about your options and keep in mind that you will likely be charged a higher interest rate if your credit score is lower.

Equity Percentage

Most lenders will offer a HELOC that is 80% of your home’s value minus the amount you owe on your mortgage. So, for example, if your home is valued at $100,000 and you owe $25,000 on your mortgage, then you may be able to access a HELOC that is $80,000-$25,000 = $55,000

Rate Shopping

Once you have an idea of how much you can qualify to receive as a credit limit, start shopping around for approximate rates and compare the terms that lenders offer.

Not all lenders will be able or willing to give you an estimated borrowing total or interest rate before you file a formal application. Unfortunately, formal HELOC applications usually involve hard credit checks, and multiple applications for credit lines can hurt your credit score.

To protect your credit, start by looking at lenders that will give you a quote without conducting a hard credit check. Prosper, for example, can give you a personalized offer instantly with no impact on your credit score.

How to Get a HELOC: The Application

When you choose a lender and file an application, you’ll have to submit basic personal and financial data. This may include:

  • Contact information including your physical address
  • Two years or more of income documentation
  • Two months or more of bank and investment statements
  • Documentation of financial events such as divorce
  • Financial records for your owned property
  • The appraised value of your home

You don’t have to submit all of this at once, but you should plan to have it on hand for when your lender requests it.

Be aware that while Prosper offers a simple, online application, many lenders have a more complicated application process—for which you should allow extra time. After calculating your personalized offer, Prosper directs you to a simple online application. It takes just minutes to complete, and you can get your credit line in a matter of weeks.

Key Takeaways

  • A HELOC lets you borrow against the equity in your home.
  • If you have strong credit and equity in your home, you may be approved to borrow up 80% of your home’s value minus whatever you still owe on your mortgage.
  • To apply for a HELOC, you’ll need to submit basic financial documentation including income information and information about your property
  • The HELOC application process can be complicated, but Prosper makes it easy by letting you apply online.

If you’re interested in learning more about a HELOC through Prosper, or a home equity line of credit, visit https://www.prosper.com/home-equity-line-of-credit to learn more. Remember, Prosper is unique in that there’s no hard credit pull required to check your rates and get your personalized offer.

Read more


HELOCs through Prosper may not be available in all states. Please carefully review your HELOC credit agreement for more information.

All HELOCs are underwritten and issued by Spring EQ, LLC, an Equal Housing Lender. NMLS #1464945.

Prosper Marketplace NMLS
Prosper Marketplace, Inc. NMLS# 111473
Licensing & Disclosures NMLS Consumer Access

Prosper Funding LLC
221 Main Street, Suite 300 | San Francisco, CA 94105
6860 North Dallas Parkway, Suite 200 | Plano, TX 75024
© 2005-2021 Prosper Funding LLC. All rights reserved.

Join our mailing list

Latest

Person checks their FICO Score

Credit Score Information

Most adults in the United States have at the very least, heard of a FICO® Score. However, most lack knowledge of the nitty-gritty of...

Woman looks up credit report compiled by the three credit bureaus Woman looks up credit report compiled by the three credit bureaus

Credit Score Information

You’ve probably heard a lot about the three credit bureaus, but many Americans aren’t sure exactly what they are. That’s OK because Prosper’s got...

MAn applies debt snowball strategy to his finances MAn applies debt snowball strategy to his finances

Credit Management

There are several common strategies to address personal debt, but one of the most well-known is the debt snowball strategy. Today, we will look...

Investor Center

Today we are sharing performance data from the Prosper Portfolio for March 2022. Highlights from the Prosper Performance Update – March 2022: Performance Update...

Ways to Save Money and the Environment Ways to Save Money and the Environment

Financial Lifestyle

There are many easy ways to save money and the environment in our everyday lives. From the laundry room to the mailbox, the grocery...

Credit Management

With another year behind us, we find ourselves in tax return season once again. While 2021 did bring back some semblances of stability and...

You May Also Like

Finance for Homeowners

The two most common options for accessing home equity are a home equity line of credit (HELOC) and a cash-out refinance. Let’s take a...

Finance for Homeowners

Curious about how to get a HELOC with a co-applicant? Prosper can help. If you’re a homeowner, you may have wondered how to get...

Finance for Homeowners

Conventional wisdom says that entering retirement with no debt is the goal when it comes to retirement strategies. Sure, that may be possible for...

Company News

BBVA USA, the U.S. subsidiary of Madrid-based BBVA, today announced it is offering a digital Home Equity Line of Credit (HELOC) through its website,...