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Best Home Equity Loan Lenders October 2023

A home equity loan is a type of loan that allows homeowners to borrow against the equity they have built up in their home. It is considered as a secured loan, since the collateral is the value of the home. Our list of lenders can help you compare rates, fees, and other terms to find the right loan for your needs.

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Key Facts

  • Mortgage Types: Purchase, Refinance, Home Equity
  • Min. Credit Score: 600
  • APR: Varies
  • NMLS#: 6606

Pros

pros iconManual underwriting available to evaluate credit

pros iconOne of the few non-bank lenders offering equity lending and reverse mortgages

pros iconCan participate in the entire process online

pros iconEnglish and Spanish-speaking loan officers available

Cons

cons iconNot available in Hawaii or New York

cons iconDoesn’t work with down payment assistance programs in all states

New American Funding Disclaimer:© 2020 Broker Solutions, Inc. DBA New American Funding. All Rights Reserved. Corporate Office: 14511 Myford Road, Suite 100, Tustin, CA 92780.†14 business day guarantee only applies to purchase transactions. This guarantee does not apply to Reverse Mortgages, FHA 203k, VA, Bond, MCC, loans that require prior approval from an investor, or brokered loans.
The guarantee does not apply if events occur beyond the control of New American Funding, including but not limited to; appraised value, escrow or title delays, 2nd lien holder approval, short sale approval, or lender conditions that cannot be met by any party.
The 14 business day trigger begins when the borrower’s initial mortgage application (including income and assets documentation) is complete, and the borrower has authorized credit card payment for the appraisal. If New American Funding fails to perform otherwise, a credit of $250 will be applied toward closing costs.

  • check mark Offers a manual underwriting service
  • check mark Customized quotes for home equity loans
  • check mark Dedicated to serving minorities
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Key Facts

  • Mortgage Types: Refinance, Home Equity
  • Min. Credit Score: 640
  • APR: Undisclosed
  • NMLS#: 1717824

Pros

pros iconLow fixed rates

pros iconSecured online application and quick funding time

Cons

cons iconAn origination fee

Figure Disclaimer: Figure Lending LLC dba Figure. 15720 Brixham Hill Avenue, Suite 300, Charlotte, NC 28277. (888) 819-6388. NMLS ID 1717824.

For licensing information, go to www.nmlsconsumeraccess.org. Equal Opportunity Lender. Equal Housing Opportunity. This site is not authorized by the New York State Department of Financial Services. No mortgage solicitation activity or loan applications for properties located in the State of New York can be facilitated through this site.

As a representative example, an eligible borrower obtained a loan amount of $15,000 with a 5% origination fee at an interest rate of 9.65% for 36 months. That would include an origination fee of $750.00 for an APR of 13.204%. They would receive $14,250.00 and make 36 monthly payments of $481.55. Loan amounts range from $5,000 to $50,000; loan term lengths are 36 months or 60 months.

California loans are made and arranged according to a Finance Lenders Law License. Licensed by the Department of Financial Protection and Innovation under the California Finance Lenders Law (License 60DBO81967). To check the rates and terms you qualify for, we will conduct a soft credit pull that will not affect your credit score. Yet, if you continue and submit an application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Figure’s Personal Loan APRs range from 5.75% to 31.44%, inclusive of a 0.25% discount for enrolling in autopay. The lowest APRs are for the most qualified applicants based on factors such as credit score, debt-to-income ratio, credit utilization, and credit inquiries; rates will be higher for other applicants. The advertised APR is only available for applicants who are eligible for and select 3-year loan terms; longer terms have higher rates. Rates frequently change, so your exact rate will depend on the date you apply.

You will be responsible for an origination fee of up to 5.00% of your loan amount, depending on your credit profile and the state where you reside. Loan terms and prices are also subject to change. Figure’s Personal Loan amounts range from a minimum of $5,000 to a maximum of $50,000. You may not be eligible for our maximum amount, as the minimum and maximum loan amounts vary depending on the state in which you reside and your credit profile.

Figure’s Personal Loan Referral Program is unavailable for borrowers or applicants in Kentucky, Ohio, or Rhode Island and does not apply to any of Figure’s other loan products. For either party to be eligible to receive the $150 gift card, they must fund the referred loan. Once complete, it may take up to 5 business days to fulfill the gift card orders, which will be delivered electronically to the email addresses associated with each account.

Next Day Funding requires the application to be approved and documents signed before 4 p.m. PST or 7 p.m. EST. Please check with your institution to ensure funds availability before attempting to access the funds. Limit one $100 bonus per customer. The bonus will be deposited in the Figure Pay account within 30 days of the second consecutive deposit, satisfying the requirements for the bonus.

HELOC: *Available APRs range from 7.15% to 16.00%. The advertised APR includes a 0.25% discount for enrolling in autopay as well as the payment of a higher origination fee in exchange for a reduced interest rate, which is not available to applicants or in all states. The lowest APRs are only available to the most qualified applicants, depending on credit profile and the state where the property is located, and those who also select five year loan terms; APRs will be higher for other applicants and those who select longer loan terms. As representative example, for a borrower with a 60% CLTV and a 740 credit score who is eligible for and chooses to pay a 4.99% origination fee in exchange for a reduced APR on a five-year Figure Home Equity Line with an initial draw amount of $50,000 would have a fixed annual percentage rate (APR) of 8.80%. The total loan amount would be $54,400. Alternatively, a borrower with the same credit profile who pays a 3.99% origination fee would have an APR of 9.10% and a total loan amount of $54,550. Your actual rate will depend on many factors such as your credit, combined loan-to-value ratio, loan term, occupancy status, and whether you are eligible for and choose to pay a higher origination fee in exchange for a lower rate. Rates change frequently so your exact APR will depend on the date you apply. APRs for home equity lines of credit do not include costs other than interest. Property insurance is required as a condition of the loan and flood insurance may be required if your property is located in a flood zone. Loan Example: A $10,000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected. In this case the total amount expected to pay by the borrower will be $13,680

  • check mark Borrow up to $400k, flexible HELOC terms
  • check mark 100% digital app & online appraisal
  • check mark Rated Excellent on TrustPilot
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Key Facts

  • Mortgage Types: Purchase, Refinance, Jumbo, Fixed, Adjustable, FHA, VA, USDA
  • Min. Credit Score: 620
  • APR: Undisclosed
  • NMLS#: 3030

Pros

pros iconRate Lock

pros iconOnline application process

pros iconGood reputation for customer satisfaction

pros iconPre-approval available

Cons

cons iconFees could potentially be high

cons iconNo physical branches available

Rocket Mortgage Disclaimer: ©2000 – 2020 Quicken Loans, LLC. All rights reserved. Lending services provided by Quicken Loans, LLC., a subsidiary of Rock Holdings Inc. “Quicken Loans” is a registered service mark of Intuit Inc., used under license. Quicken Loans® (also doing business as Rocket HQ), Rocket Homes Real Estate LLC, and Rocket Loans® are separate operating subsidiaries of Rock Holdings Inc. Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation and applicable legal and regulatory requirements.

  • check mark Turn home equity you've earned into cash
  • check mark Convenient, fixed-rate payments
  • check mark 35+ years of industry expertise
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Key Facts

  • Mortgage Types: Purchase, Refinance, Home Equity, Adjustable, Fixed
  • Min. Credit Score: 580
  • APR: Undisclosed
  • NMLS#: 3030

Pros

pros iconClosing costs rolled into loan automatically

pros iconSmartphone app

pros iconSyncs with your bank account for easy application process

pros icon98% of financial institutions supported for digital asset verification

Cons

cons iconCan’t have face-to-face interaction with loan officer; online only

cons iconNo alternative credit data considered

Ro©2000 – 2020 Quicken Loans, LLC. All rights reserved. Lending services provided by Quicken Loans, LLC., a subsidiary of Rock Holdings Inc. “Quicken Loans” is a registered service mark of Intuit Inc., used under license. Quicken Loans® (also doing business as Rocket HQ), Rocket Homes Real Estate LLC, and Rocket Loans® are separate operating subsidiaries of Rock Holdings Inc.
Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation and applicable legal and regulatory requirements. Loan Example: A $10,000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each. The actual payment amount and year-end balance will vary based on the APR, loan amount, and term selected. In this case the total amount expected to pay by the borrower will be $13,680

  • check mark Convenient, fixed-rate payments
  • check mark Support from qualified Home Loan Experts
  • check mark Finance your next big home improvement project
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Key Facts

  • Mortgage Types: Purchase, Refinance, adjustable, fixed, jumbo, FHA, VA, and USD
  • Min. Credit Score: 620
  • APR: Undisclosed
  • NMLS#: 1168

Pros

pros iconEasy online application process

pros iconTransparent information on their website

pros iconCustomized rates and quick pre-qualification

pros iconDiverse range of loan options

pros icon3% minimum down payment on offer

pros iconAccurate quotes given

Cons

cons iconApplication fee of $500

cons iconOffers no program for first-time homebuyers

The advertised rates also assume the borrower fully documents income, assets and liabilities, escrows for taxes and insurance, and there is no subordinate financing. * While SSN and hard credit pull are not typically required in order to review your available mortgage rates and get pre-qualified, if you choose to continue and submit a loan application, AmeriSave will then request your consent to pull a full credit report in order to proceed.

  • check mark Customized rate quote in under 3 minutes
  • check mark Transparent pricing and fee structure
  • check mark Online application available 24x7
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Key Facts

  • Mortgage Types: Home equity
  • Min. Credit Score: 500
  • APR: Undisclosed

Pros

pros iconProvides flexibility to use cash for a variety of purposes without incurring monthly payments or interest charges

pros iconOffers the opportunity to buy back equity at any time during the agreement

pros iconDesigned to be a flexible option for homeowners who may not qualify for traditional home equity loans or credit lines

pros iconCan help homeowners facing financial hardship or who are looking for a way to access the equity in their property

Cons

cons iconInvolves giving up a stake in the future value of your home

cons iconEach home equity agreement is subject to individual underwriting review, which means that not all borrowers may qualify

cons iconMay not be suitable for homeowners who are looking to borrow a large amount of money or who need a long-term financial solution

cons iconSome homeowners may prefer the security of a traditional loan or credit line that is secured by their home as collateral

Unlock Agreements are provided exclusively by Unlock Partnership Solutions Inc., Unlock Partnership Solutions AO1 Inc., Unlock Partnership Solutions AO2 Inc., and Unlock Homeownership Solutions Inc., all of which are wholly-owned subsidiaries of Unlock Technologies, Inc. (collectively, “Unlock”).
The applicable Unlock entity enters into the Unlock Agreements directly with consumers and does not act as an agent or broker on behalf of any third-party. No agency relationship shall be formed between any Unlock entity and a consumer pursuant to or in connection with an Unlock Agreement. All Rights Reserved.
*Application to funding may take over 60 days to complete. Funding timelines may vary depending on factors, including, but not limited to appraisal turnaround times and follow-ups required for verification of property details and a clear title.
Liens or any interest secured on the property by MV Realty must be paid off and removed as a condition to close.
Terms and conditions apply.

  • check mark Use funds for anything
  • check mark Suitable for low credit score
  • check mark No mandatory income requirement

Top Home Equity Loan Lenders

Naf logo
New American Funding

A Variety of Customizable Mortgage Options

View rates

580

Min Credit Score

5.250-6.437%

APR. Fixed Rate

Max $2M

Mortgage Amount

8-30 years

Repayment terms

No

Soft Credit Pull

Marketplace

Lender Type

None

Underwriting Fee

Yes

Other Fees

Undisclosed

Origination Fee

None

Prepayment Fee

14 Days

Funding Time

6606

NMLS

Mortgage Refinance

5.250-6.437%

APR. Fixed Rate

Home Equity

Min 3.5%

APR. Fixed Rate

Pros & Cons

drop-down-btn
  • con-icon Manual underwriting available to evaluate credit
  • con-icon One of the few non-bank lenders offering equity lending and reverse mortgages
  • con-icon Can participate in the entire process online
  • con-icon English and Spanish-speaking loan officers available
  • con-icon Not available in Hawaii or New York
  • con-icon Doesn’t work with down payment assistance programs in all states

Mortgage Type

drop-down-btn
  • Mortgage Purchase
  • Mortgage Refinance
  • Fixed
  • Adjustable
  • Home Improvement
  • Home Equity Line of Credit
  • FHA
  • VA
  • Jumbo
Quicken loans logo with rocket
Quicken Loans

Expert Support Every Step of The Way

View rates

620

Min Credit Score

Max $3M

Mortgage Amount

8-30 years

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

None

Underwriting Fee

Yes

Other Fees

$1,200 on average

Origination Fee

None

Prepayment Fee

26 Days

Funding Time

3030

NMLS

Mortgage Refinance

$25K-$3M

Mortgage Amount

Home Equity

$45K-$350K

Mortgage Amount

Pros & Cons

drop-down-btn
  • con-icon Rate Lock
  • con-icon Online application process
  • con-icon Good reputation for customer satisfaction
  • con-icon Pre-approval available
  • con-icon Fees could potentially be high
  • con-icon No physical branches available

Mortgage Type

drop-down-btn
  • Mortgage Purchase
  • Mortgage Refinance
  • Fixed
  • Adjustable
  • FHA
  • USDA
  • VA
  • Jumbo
Rocket-Mortgage-logo
Rocket Mortgage

35+ Years of Industry Expertise

View rates

580

Min Credit Score

6.475-7.186%

APR. Fixed Rate

$25K-$3M

Mortgage Amount

8-30 years

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

None

Underwriting Fee

Yes

Other Fees

Variable, around $1,200

Origination Fee

None

Prepayment Fee

26 Days

Funding Time

3030

NMLS

Mortgage Refinance

Max $3.5M

Mortgage Amount

Home Equity

$45K-$350K

Mortgage Amount

Pros & Cons

drop-down-btn
  • con-icon Closing costs rolled into loan automatically
  • con-icon Smartphone app
  • con-icon Syncs with your bank account for easy application process
  • con-icon 98% of financial institutions supported for digital asset verification
  • con-icon Can’t have face-to-face interaction with loan officer; online only
  • con-icon No alternative credit data considered

Mortgage Type

drop-down-btn
  • Mortgage Purchase
  • Mortgage Refinance
  • Fixed
  • Adjustable
  • Home Equity Loan
  • FHA
  • USDA
  • VA
  • Jumbo
amerisave_vertical_nmls_l_mobi
AmeriSave

Customized Mortgages to Fit Your Budget

View rates

630

Min Credit Score

6.5-6.6%

APR. Fixed Rate

Min 6.5%

APR. Variable Rate

$60K-$1.5M

Mortgage Amount

10-30 years

Repayment terms

Yes

Soft Credit Pull

Direct

Lender Type

Undisclosed

Underwriting Fee

Yes

Other Fees

None

Origination Fee

None

Prepayment Fee

25 Days

Funding Time

1168

NMLS

Mortgage Refinance

Min 6%

APR. Fixed Rate

Min 6%

APR. Variable Rate

Pros & Cons

drop-down-btn
  • con-icon Easy online application process
  • con-icon Transparent information on their website
  • con-icon Customized rates and quick pre-qualification
  • con-icon Diverse range of loan options
  • con-icon 3% minimum down payment on offer
  • con-icon Accurate quotes given
  • con-icon Application fee of $500
  • con-icon Offers no program for first-time homebuyers

Mortgage Type

drop-down-btn
  • Mortgage Purchase
  • Mortgage Refinance
  • Fixed
  • Adjustable
  • Home Equity Loan
  • Home Equity Line of Credit
  • FHA
  • USDA
  • VA
  • Jumbo

What is a Home Equity Loan?

A home equity loan is a loan that allows homeowners to borrow money using the equity in their home as collateral. The loan amount is based on the difference between the current value of the home and the amount owed on mortgages or liens. Homeowners typically use home equity loans for big expenses like home renovations or big expenses.

You may have heard of home equity loans referred to under a different name, such as:

  • Home equity installment loan
  • Second mortgage
  • Equity loan

These all mean the same thing: obtaining a loan against the equity (ownership) you’ve accumulated in your property.

How to Get the Best Home Equity Loan in 6 Steps

How to Get a Home Equity Loan in 6 steps

How Does it Work?

In this loan structure, the borrower’s home equity is used as collateral for the lender. Securing a loan against home equity helps protect the lender since the home can be sold if the loan cannot be repaid. This structure also means lenders often provide more favorable rates than other types of loans.

Borrowers build equity in one of two ways:

  • When paying down their mortgage.
  • When their home’s value increases. Of course, the opposite is also true. If your house value falls, your equity will be negatively impacted.

Like a traditional mortgage, a home equity loan will have a repayment schedule dictating recurring payments. Also, like a conventional mortgage, these repayments will be composed of principal and interest.

How is The Loan Amount Calculated?

Lenders will typically determine loan amounts based on several criteria. Usually, the better the borrower's financial position, the higher the loan amount and the more favorable the rate they will obtain.

In addition to considering a borrower’s credit score and payment history, lenders will usually determine a loan amount in part based on a combined loan-to-value (CLTV) ratio.

The metric represents the ratio of all secured loans on a property relative to the property’s entire value. Lenders typically lend to borrowers with CLTV ratios of no more than 80%.

In other words, lenders usually limit the loan to 80% of the property value.

For example, a $100,000 property with a CLTV ratio of 80% would imply the loan size is $80,000 (80% of $100k).

SEE: Home Equity Loan Calculator

How to Choose a Home Equity Lender

There are several elements to consider when deciding on a lender, including:

  • What size of home equity loans does the lender offer?
  • Will you be eligible for a loan with this lender?
  • What terms are offered?
  • What is the current interest rate range (APR range)?
  • What is the quality of customer service?
  • How have other borrowers reviewed the lender?

Borrowers will need to assess a myriad of factors when choosing a lender. For most borrowers, a low-interest rate will be one of the main drivers of their decision. For others, quality customer service is essential and may trump another lender with a slightly lower rate.

Ultimately, the appropriate lender will depend on the factors important to the borrower.

What is a Good Home Equity Loan Interest Rate?

Average Interest Rates for Home Equity Loans (as of August 23, 2023):

  • General Home Equity Loan: The average rate stands at 8.59%, with figures spanning from 7.97% to 9.91%.
  • 10-Year Fixed Home Equity Loan: The average rate is 8.72%, fluctuating between 7.81% and 9.83%.
  • 15-Year Fixed Home Equity Loan: The rate averages at 8.70%, with a spectrum from 7.93% to 10.68%.

Top Home Equity Loan Rates

Lender Loan Amount Loan Term APR Range Best For
Discover $35,000 – $300,000 10 to 30 years 7.49% - 13.99% Low Rates
U.S Bank $15,000 – $750,000 Up to 30 years Starting at 7.95% Low fees at a national bank
KeyBank $25,000-$250,000 1 to 30 years 8.03% - 12.93% Homeowners with limited equity
Spring EQ Up to $500,000 Not specified Not specified Fast funding
Flagstar Bank $10,000 – $1,000,000 10 to 20 years Starting at 7.99% Flexible loan terms
BMO Harris Bank $25,000 – $150,000 5 to 20 years starting at 7.39% Different Loan Options
Frost Starting at $2,000 7 to 20 years 5.34% - 5.64% Low fees at a regional bank
Connexus Credit Union Starting at $5,000 5 to 20 years Starting at 7.96% Branch network
Regions Bank $10,000 – $250,000 7 to 20 years Starting at 6.38% Customer experience

Average Home Equity Loan Rates by Market

Market Average Rate Average Rate Range
Boston 7.27% 5.00% - 8.48%
Chicago 9.04% 8.01% - 10.86%
Detroit 9.60% 7.20% - 10.80%
New York Metro 8.50% 8.49% - 8.50%
Philadelphia 7.55% 5.49% - 8.49%
Market Total 8.00% 5.05% - 10.88%

How to Get a Home Equity Loan

Obtaining a home equity loan can be broken down into four simple steps:

  • Perform a credit check
    Before applying for a home equity loan, consider checking your credit score to confirm if you’re likely to qualify. This step will also help determine the interest rate you might expect to receive. Typically, lenders require credit scores of 620 and up.
  • Shop around
    Compare available options before deciding on a lender to ensure you can find the institution that can best fulfill your needs.
  • Complete the application
    Lenders require several documents to be completed and provided, like pay stubs and tax returns.
  • Obtain your loan
    Once the loan is approved and signed, the lender will release the funds to you. This stage can range from two weeks to upwards of two months.

Home Equity Loan Requirements

The requirements for eligibility can vary widely between lenders. Still, by and large, the following criteria can typically be expected:

  • Homeownership: Only homeowners can apply for a home equity loan. You must have an ownership stake in the property and be listed on the title.
  • Sufficient equity: You need to have built up enough equity in your home to qualify for a home equity loan. Typically, lenders require a minimum of 20% equity. An equity of at least 20% also means an LTV ratio of at least 80%.
  • Good credit: Lenders will consider your credit score when determining your eligibility for a home equity loan. Generally, a credit score of 620 or higher is required to qualify.
  • Stable income: You must have a stable income and be able to demonstrate your ability to repay the loan. Lenders will require proof of income, such as pay stubs, W-2s, or tax returns.
  • Low debt-to-income ratio: Your debt-to-income ratio (DTI) is the amount of debt you have relative to your income. Lenders typically prefer a DTI of 43% or lower.
  • Property value: The value of your property is a factor in determining your eligibility for a home equity loan. Lenders will typically require an appraisal to determine the current value of your home.
  • Clear title: Lenders will perform a title search to ensure that there are no outstanding liens or other issues with the property that could affect their security interest.

Home Equity Loan Uses

People take home equity loans for a variety of reasons, including:

  1. Home improvements: Homeowners often use home equity loans to finance home improvements, such as remodeling a kitchen or adding a new room to their home.
  2. Debt consolidation: Home equity loans can be used to consolidate high-interest debt, such as credit card debt, into one lower-interest loan, making it easier to manage monthly payments.
  3. Education expenses: Some homeowners use home equity loans to pay for college tuition, either for themselves or for their children.
  4. Medical expenses: Home equity loans can help cover medical expenses, such as unexpected medical bills or costly procedures.
  5. Starting a business: Home equity loans can be used to finance a new business venture or to expand an existing business.
  6. Emergency expenses: Homeowners may take out a home equity loan to cover unexpected expenses, such as emergency home repairs or damage caused by a natural disaster.

In general, a home equity loan can be a good option for borrowers who need a large sum of money and have built up equity in their homes. However, it's important to carefully consider the risks and benefits of a home equity loan before applying, as failure to repay the loan could result in foreclosure on your home.