Tap Into Your Home Equity with Quicken Loans

Have you ever wondered if you could leverage the equity in your home to get some extra cash? Many homeowners are sitting on a goldmine of untapped equity that could be used to pay off high-interest debt, fund home improvements, or cover unexpected expenses. That’s where Quicken Loans home equity loans come in.

As one of the largest mortgage lenders in America, Quicken Loans has helped over 3 million families finance their homes. Their home equity loans allow borrowers to access their accrued home equity in a lump sum payment. Whether you need to consolidate debt, renovate your kitchen, or pay college tuition, a home equity loan from Quicken Loans provides flexible financing options tailored to your unique needs.

In this article we’ll cover everything you need to know about Quicken Loans home equity loans including

• What is home equity and how do you calculate it?
• What are the benefits of a home equity loan?
• What are the requirements and process for getting a Quicken Loans home equity loan?
• What are the interest rates and alternatives to consider?

Let’s dive in and see if tapping into your home through a Quicken Loans equity loan is the right move for you

What Exactly is Home Equity?

Before we discuss home equity loans, it helps to understand what home equity is in the first place.

Your home equity represents the current market value of your home minus any outstanding mortgage debt tied to the property. As you make mortgage payments over time, more of each payment goes toward paying down principal and building equity. Here is a simple formula:

Home Equity = Current Market Value of Home – Existing Mortgage Debt

For example:

• You purchased your home for $200,000
• You took out a mortgage loan for $180,000
• Years later, your home is now worth $250,000
• Your outstanding mortgage balance is $150,000
• Therefore, your home equity is $250,000 – $150,000 = $100,000

The equity comes from both paying down your mortgage principal and appreciation in the value of your home over time. Keep in mind that home values can also decrease, lowering your equity.

How Do Home Equity Loans Work?

A home equity loan allows you to borrow against the equity that has built up in your home.

With a Quicken Loans home equity loan, you would receive the loan amount you qualify for in a lump sum payment. The loan is secured by using your home as collateral. This differs from an unsecured loan like a personal loan or credit card.

You would pay back the home equity loan over a fixed term, usually between 10-30 years, with a fixed interest rate and monthly payments. The loan acts as a second mortgage on your home behind your main mortgage.

Home equity loans allow you to access your home equity without having to sell or refinance your home. The proceeds can be used for almost any purpose – debt consolidation, home improvements, college tuition, and more.

What Are the Benefits of a Home Equity Loan?

There are several reasons why borrowing against your home equity can be advantageous:

• Lower Interest Rates – Home equity loans typically have lower interest rates than other financing options like personal loans, credit cards, and auto loans. The average home equity loan rate is around 7-9% APR compared to 14-36% for credit cards.

• Fixed Payments – Home equity loans have fixed interest rates and monthly payments. This provides predictability in budgeting compared to adjustable rate loans.

• Tax Benefits – The interest paid on home equity loans is usually tax deductible, which can provide savings. Consult a tax advisor to understand the deduction.

• Consolidate Debt – A home equity loan allows you to roll multiple debts into a single monthly payment at a lower rate. This simplifies payments.

• Access Large Sums – Based on your equity, you may be able to access more funds than an unsecured loan would allow. This enables major projects.

• Retain Ownership – With a home equity loan, you can tap equity without selling or refinancing your home. You retain ownership of your property.

What Are the Requirements for a Quicken Loans Home Equity Loan?

While home equity loan requirements can vary slightly between lenders, here are some general eligibility standards with Quicken Loans:

• Credit Score – A minimum credit score around 620 is recommended. The higher your score, the better rate you can qualify for.

• Loan-to-Value (LTV) Ratio – Most lenders limit loans to 70-85% of your home equity. With 20% equity, you may borrow up to 15-17% through a home equity loan.

• Debt-to-Income Ratio – Your total monthly debts divided by gross monthly income should be below 45% ideally. The lower the better for approval odds.

• Home Value – You’ll need to have sufficient equity in your home to make the loan worthwhile. Quicken Loans can help determine your home value.

• Homeowner’s Insurance – Lenders require you to maintain homeowner’s insurance for the duration of the loan.

As with any mortgage loan, you’ll also need to provide income documentation, tax returns, proof of identification, and authorize a home appraisal during the application process.

Step-by-Step Process for Getting a Quicken Loans Home Equity Loan

If you need a home equity loan, follow this step-by-step guide to getting one with Quicken Loans:

1. Check your home equity – Determine your available equity by checking your home value and current mortgage balance. Recall the home equity calculation earlier.

2. Review your credit score – Request a free copy of your credit report and check your score. Take steps to improve it if needed.

3. Compare lender options – Research multiple lenders like Quicken Loans and compare interest rates and fees. Get loan estimates.

4. Submit your application – Apply online by completing Quicken Loans’ application and submitting required documents.

5. Get pre-approved – Quicken Loans will assess your eligibility and issue a pre-approval letter if you qualify.

6. Home appraisal – A licensed appraiser will evaluate your home’s current market value to verify equity.

7. Loan approval & closing – After appraisal, underwriting, and title search, you’ll finalize loan documents and close.

8. Receive loan funds – Once closed, Quicken Loans deposits the loan amount directly into your bank account as a lump sum.

And voila! Like that, you’ve unlocked your home equity with a simple home equity loan from Quicken Loans.

What Are Current Home Equity Loan Interest Rates?

Interest rates fluctuate daily based on market conditions. As of January 2023, average home equity loan rates are:

• 10-year fixed rate: 7.25% – 9.5%
• 15-year fixed rate: 7.5% – 10%
• 20-year fixed rate: 8% – 11%

In general, home equity loans offer lower rates than credit cards and personal loans, but higher than first-position mortgages. Rates are tiered based on your credit score and loan-to-value ratio. Quicken Loans can give you an accurate rate quote based on your specific financial situation.

Alternatives to Home Equity Loans

While home equity loans are a great option, here are a few other ways to leverage home equity:

• Cash-out refinance – Refinance your mortgage for more than you owe and take the difference in cash.

• HELOC – A home equity line of credit works like a credit card with flexible draws.

• Reverse mortgage – Lets seniors access equity with no monthly payments required.

Always compare your alternatives before deciding the best home equity loan option for your needs.

The Bottom Line

Tapping into your home equity with a Quicken Loans home equity loan allows you to unlock funds for major expenses while retaining ownership of your property. Just be sure to only borrow what you can comfortably afford to repay on time to avoid putting your home at risk.

With competitive fixed rates and flexible terms to choose from, Quicken Loans has home equity solutions whether you need to pay tuition, renovate your home, or consolidate high-interest debts. See if you qualify today!