Lenders evaluate credit score, home equity, DTI, and CLTV to approve a home equity loan. Most require 620+ credit and 15-20% combined equity. Here's everything you need to qualify. Dream Financial Management since 1994.
Most lenders require 620 FICO minimum. Rates improve significantly at 700+. Some lenders accept 580+ with compensating factors like high equity and low DTI.
Combined loan-to-value (CLTV) typically capped at 85%. Some lenders go to 90%. Example: $500K home, $300K first mortgage = $125K max home equity loan at 85% CLTV.
Total monthly debts including both mortgage payments must not exceed 43% of gross income. Some lenders allow up to 50% with high credit scores.
Pay stubs (30 days), W-2s (2 years), tax returns (2 years if self-employed), bank statements (2-3 months), mortgage statement, homeowners insurance declaration.