Have you been denied for a HELOC?
- Randy Stock
- 3 days ago
- 1 min read
Getting denied for a Home Equity Line of Credit (HELOC) is more common than most think—nearly half of all applications are currently rejected. Because HELOCs are second mortgages, lenders take on higher risk and use much stricter criteria than they do for primary home loans.
If you've been denied, here are the most likely reasons and your immediate next steps:
Top Reasons for HELOC Denial
Insufficient Equity: Most lenders require a Combined Loan-to-Value (CLTV) ratio of 80% to 85%. If your current mortgage plus the new line of credit exceeds this percentage of your home's appraised value, you'll be denied.
High Debt-to-Income (DTI): Lenders typically want your total monthly debt payments (including the new HELOC) to be under 43% of your gross monthly income.
Credit Score Below 620-680: While some specialized programs go lower, most traditional banks require at least a 620, with many now preferring 680+ for approval.
Appraisal Issues: If the home appraisal comes in lower than expected, it may wipe out the equity you thought you had.
Its time to apply for a (HEI) Home Equity Investment with Home Equity Investment Experts TODAY!
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