Compare your options
There are numerous ways to get cash for your home equity, including home loans, HELOCs, and home equity investments. Use these tables to compare your options and determine which one makes the most sense for your financial situation.
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Qualification criteria
Looking for more info on different ways to tap into your home equity? Download our helpful guide to reference as you compare your options.
Download the GuideHome equity loan | HELOC | Cash-out refinance | Reverse mortgage | ||
---|---|---|---|---|---|
Average credit score | Typically over 630 (no firm requirement) | Min score of 620 | Min score of 620 | Min score of 620 | No firm requirement |
Average loan-to-value | Max LTV of 75% | Max LTV of 80-85% | Max LTV of 80-85% | Max LTV of 80% | Max LTV of 50%-65% |
Average debt-to-income | N/A | 43% | 43% | 50% | N/A |
Other restrictions (vary by lender) | No prepayment penalties | Prepayment penalties | Minimum annual draw requirements, prepayment penalties + cancellation fees occur with some lenders | Prepayment penalties + cancellation fees | Must be 62+ years old, must own home outright or have single primary lien |
Pricing & terms
( Example based on home value of $1 million )
Home equity loan | HELOC | Cash-out refinance | Reverse mortgage | ||
---|---|---|---|---|---|
Investment/loan amount | $100,000 | $100,000 | $100,000 | $100,000 | $100,000 |
Term | 10 years | 10 years | 10 years | 10 years | Loan repaid when borrower passes away or sells home |
Loan | No | Yes | Yes | Yes | Yes |
Interest rate type | None | Fixed or variable | Typically Variable | Fixed or variable | Fixed or variable |
Average interest rate | No interest | 7.09% | 6.04% | 4.7% | 3.68% |
Monthly payment | None | $1,165 | $1,112 | $1,050 | None |
Costs & fees | 3% of investment + signing costs | 3-5% of the loan amount | $100 in annual fees | 2-5% of loan amount | Origination fee up to $6,000 + 2% MIP fee + monthly option fee up to $35 |
Due at settlement, sale, or refinancing | 13.9-16.7% of home value (dependent on appraised home value at settlement) | Outstanding principal | Outstanding principal | Outstanding principal | Outstanding principal + interest + mortgage insurance |
*Loan interest levels and payments are based on a credit score of 730. Rates sourced from 2020 Bankrate.com data
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