To qualify for a home equity line of credit, you’ll need more than equity in your property. Your current income level, credit score, and credit history all play a part. A lender may deny your HELOC application because of your income level or a red flag on your credit report.
While low income and poor credit could be roadblocks, there are ways to boost your HELOC approval chances. Here, we’ll cover how to get a home equity line of credit by applying with a co-applicant.
How to Get a Home Equity Line of Credit with a Co-Applicant
Your co-applicant, sometimes referred to as the co-borrower, is a trusted person who’ll share the liability for repaying your home equity line of credit. The co-applicant assumes equal ownership, payment and overall responsibility for the loan payments.
When considering how to get a home equity line of credit, you might seek out a reliable co-applicant with a solid credit history or a higher income than yours to improve your approval chances. Often, people choose to co-borrow with a partner or spouse to qualify for a larger loan than either one of the individuals could get on their own.
The Benefits of a Co-Applicant on a HELOC
A co-applicant with good credit could improve approval chances for a primary borrower with shakier. A co-applicant may also help secure a lower interest rate. Not only that, you might be able to access more equity in your home by applying for a HELOC with a co-applicant.
If you’re thinking about how to get a home equity line of credit to consolidate debt or pay for home renovations, consider adding a trusted co-applicant to your HELOC application to increase your approval chances.