Best Home Equity Loans Of 2024

Best Home Equity Loans Of 2024 – A home equity loan enables homeowners to borrow against the equity of their home to consolidate debt or fund other home improvement projects. The best home equity loan lender provides a wide array of loan amounts and terms at very competitive interest rates.

Best Home Equity Loans Of 2024

After getting approved for the home equity loan, you can use the funds to pay down high-interest debt and make home improvements. Finding the best home equity loan lender isn’t easy; thankfully, this blog post aims to provide some of the best home equity loan lenders as well as other relevant information.

What is A Home Equity Loan?

A home equity loan is a second mortgage that turns your home equity into real cash. It allows you to borrow against the value of your home. You can get this value by paying part of your mortgage and through rising real estate prices.

The lender will decide how much you can borrow depending on the amount of equity that you have in your home. If you are approved for the loan, the lender will then make a second mortgage and give you a check for the full loan amount. Then you can use the money to fund other home projects or consolidate debt.

How Does a Home Equity Loan Work?

Home equity loans enable you to access the equity you have in your home, which is the difference between the value of your home and the outstanding debt that you have on your property. The interest rates you have on home equity loans are mostly fixed, which means that your payments won’t change. Just like other mortgage products, your house serves as collateral for the loan. If you are not able to pay for the loan, then you will risk losing your house.

What Can I Use a Home Equity Loan For?

Home equity loans can be used for anything, and they include:

  • Expanding or starting a business.
  • Completing home renovations and energy-efficient upgrades.
  • Buying a rental property.
  • Consolidating debt by combining multiple debts into one.
  • Avoid mortgage insurance.

If you are approved for a home equity loan, you can use the money you get to fund other projects.

Home Equity Loan Requirement

To be eligible for a home equity loan, you need to meet the requirements. Although the requirement varies from lender to lender, most lenders require the borrower to have the following requirements:

  • At least 80% equity in your property.
  • Excellent financial history.
  • A credit score of 620.
  • The debt-to-income ratio is no higher than 43%.
  • Proof of homeowner’s insurance.
  • Proof of stable and sustainable income from the previous years.

The lender expects the borrowers to meet the above requirements to be eligible for a home equity loan.

Best Home Equity Loans Of 2024

There are lots of home equity lenders on the market; however, how do you find the one that suits you? In this segment, I will list some of the best home equity loan lenders. You can compare them and choose the one that best fits your needs.

PNC Bank

PNC Bank operates in more than 50 states and offers a wide array of mortgage products, including specialty loans for moderate- and low-income borrowers. Also, they provide an innovative online experience known as Home Insight, which offers a guide into the home buying process and thus allows customers to know the mortgage payment that they can afford and start shopping around for homes with loan products and real-time quotes.

It also enables customers who have applied for a loan to go through the approval process and upload the necessary documents. In addition, the customer can also invite real estate agents to keep track of the progress. Home Insight adds a home affordability analysis, the ability to search for available house listings, and a monthly payment estimator that accounts for insurance and taxes.

It also connects budgets, rates, and loan products with a real estate search to help home buyers understand how much house they can afford. Furthermore, PNC also provides a full digital pre-approval application where borrowers can apply online and receive approval in just a few minutes.


LoanDepot is one of the biggest non-bank mortgage lenders in the United States, with over 150 branches across the country and a good online presence. Some of its loan products include government-backed loans, conventional mortgages, and refinances.

The borrowers who use the lender’s Mello Smartloan online technology will have their closing time reduced by 17 days by lessening the paperwork and digitally connecting and verifying assets, income, and debt.

In addition, Mello Smartloan can conduct title clearance, which is mostly one of the more time-intensive steps of the underwriting process. Another perk of this technology is that it also determines if the borrower can waive the appraisal requirement, which saves time and money on the cost of your mortgage.

Bank of America

Bank of America is a huge bank lender that provides mortgage and refinance loan products along with full banking services. There are over 5,000 branch locations in the United States. Plus, this lender offers customers online applications, electronic signatures for documents, and online rate locks. The borrowers can also connect with a lending specialist online.

Bank of America provides lower-than-average mortgage rates and the convenience of applying online or in person. This lender also has an Affordable Loan Solution mortgage that requires a low down payment of just 3% and no private mortgage insurance, which can save you money. Furthermore, there are several discounts for existing customers, including a $600 closing-cost discount.

TD Bank

TD Bank’s website is very easy to use, and it has a rate tool that personalizes options depending on the customer’s location. The loan term ranges from 5 to 30 years, and rate information is very easy to find.

In addition, they provide borrowers with a 0.25% interest rate discount on their home equity loan products if they open a TD Bank checking or savings account, along with automatic payment deductions. In addition, a TD Bank home equity loan can be obtained through an investment property.

Spring EQ

Spring EQ is one of the lenders that specializes in home equity loan products. You are also allowed to borrow up to 95% of the value of your home. This is more than the maximum that most lenders offer. The homeowner can convert equity to cash in just 2 weeks; however, the average is 21 days.

Navy Federal Credit Union

Navy Federal Credit Union is among the lenders that enable eligible homeowners to borrow up to 100% of the value of their home. Military borrowers might be qualified for additional discounts and a streamlined approval process. The customers can also get support either by phone or on social media. Their website also offers a step-by-step guide to help you know the timeline of your home equity loan.

How To Get the Best Home Equity Loan

There are several types of home equity loan lenders available for you to choose from, and every one of them has their approval guidelines. To get the best home equity loan, you can follow the steps below:

  • Boost your credit score: The average score for most equity lenders is 620. However, some of them set their minimums at 660 to 680. If your credit score is higher, then your home equity loan rate will be better.
  • Lower your DTI ratio: Most lenders will divide your debt, which includes your new home equity loan, by your pretax income to be able to determine your debt-to-income ratio. The standard limit is mostly 43%; however, a lower DTI can get you a better rate.
  • Borrow less of your home’s value: the usual maximum loan-to-value ratio is 85%; however, lenders provide better rates if you borrow less of your home’s value.
  • Avoid second home equity loans. The best home equity loan rates can go to homeowners who live in their home as their main residence.
  • Shop around: home equity lenders might provide special incentives to earn your business, such as discounted rates, if you have credit accounts with them.

With the steps listed above, you will be able to get the best home equity loan rates from the lender of your choice.

How Long Does It Take to Get a Home Equity Loan?

It typically takes about two to four weeks to close on a home equity loan. You will usually get your funds the following business day after your closing.

How Much Can You Borrow on a Home Equity Loan?

The lender will not allow you to borrow more than the equity built into your home. Most lenders will approve loans of up to 80 to 85% of the combined loan-to-value ratio.