Not all lenders have the same standards for home equity loans. Because of this, you should shop around for rates and terms from multiple lenders. Banks will be more likely to approve you for a home equity loan if you have:
At least 15 percent to 20 percent equity in your home.
A minimum credit score of 620, based on a range of 300 to 850.
A maximum debt-to-income ratio (DTI) of 43 percent, or up to 50 percent in some cases.
On-time bill payment history.
Stable employment and income history.
If your credit isn?t great, lenders may require that you carry less debt relative to your income and have more equity in your home.
Darryl founded Smith Financial Advisors Inc. in 2006 after over 30 years experience in financial services including Mergers & Acquisitions, Investment Banking and traditional Commercial Banking activities at Bank One. Smith Financial Advisors is a Registered Investment Advisor in the State of Illinois. The firm specializes in Investment management, financial planning, and retirement planning.