What Are the Requirements to Take Out a HELOC?

You will need to first build up equity in your home, typically at least 15% to 20%, in some cities as much as 35%, of the total value of the home. HELOC lenders will also require you to have a certain maximum debt-to-income ratio, typically 40%, and a credit score of at least 620.

You can typically borrow up to 75% to 85% of the value of your home, minus the amount you still owe on your mortgages attached to that home. You should aim to have a high credit score and secure monthly income to take full advantage of a HELOC's benefits.

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A high credit score and regular monthly income will also enable you to qualify for lower interest rates.