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How long do you have to own your home before you can get a home equity loan or line of credit?
Does this vary by institution?4 years ago - 2 answers
How long you have been there may be irrelevant now.
What is relevant is the value of the home relative to how much you owe on it.
If you owe more than 80% of what the home is worth, my guess is that no one will give you a loan or line of credit now.
It's not so much the time frame, but the amount of equity you have in the property, and to some extent where you live. I'm talking about states other than TX right now. If your house is valued at $100k and you made a down payment of $40k, you have plenty of equity to get a home equity loan. Depending on your credit, income, assets and debt ratio, you can borrow up to about 90% of the value of your home these days, including the current mortgage. If you have really great credit, you may be able to borrow up to 100% on a line of credit, but you have to be pretty special for that.
If you got a 95% loan, and only have 5% equity in your home, you're not going to get anything right now. You need to pay the mortgage down to at least 80% before you waste your time and application fees.
Now in TX, there are a lot of rules. Your cumulative mortgages can't exceed 80% of the current value of the property. If the 2nd is a HELOC instead of a HELOAN, the HELOC can't exceed 50% of the value. All owners must live in the home, there are acreage parameters and more I can't remember...I haven't done T heloan/heloc in about 5 years.