Quicken Loans Home Equity: A Complete Guide

Home equity loans and lines of credit allow homeowners to access the equity they’ve built up in their home. Quicken Loans, one of the largest mortgage lenders in America offers home equity lending solutions to help homeowners tap into their equity. In this comprehensive guide, we’ll explain everything you need to know about getting a Quicken Loans home equity loan or line of credit.

What is Home Equity?

Before diving into Quicken Loans’ home equity offerings it helps to understand what home equity is.

Home equity refers to the current financial stake you have in your home. It’s calculated by taking the current market value of your home and subtracting any outstanding mortgage debt and liens against the property

For example:

• Your home is currently worth $300,000
• You owe $180,000 on your mortgage
• Your home equity is $300,000 – $180,000 = $120,000

As you pay down your mortgage loan over time, you build additional equity. And as your home value appreciates, your equity grows as well. Tapping into your home equity can provide access to funds for major expenses, debt consolidation, home improvements, and more.

Quicken Loans Home Equity Loan Overview

A home equity loan from Quicken Loans provides homeowners with a lump sum of cash that can be used for any purpose. It works by using your built-up home equity as collateral.

Here are some key details on Quicken Loans’ home equity loan program:

• Loan amounts – You can borrow from $15,000 up to $500,000 depending on how much equity you have available.

• Interest rates – Home equity loans will have higher rates than a first mortgage refinance, but lower than credit cards or personal loans. Rates are fixed so they don’t change.

• Terms – Loan terms up to 240 months (20 years) are available. Longer terms have lower monthly payments.

• Payments – You will have a fixed monthly principal and interest payment on the loan.

• Fees – Application fees, appraisal fees, and closing costs apply. There are no prepayment penalties.

• Collateral – The home equity loan uses your home as collateral, meaning foreclosure is possible if you default.

• Credit requirements – A minimum credit score in the mid 600s is generally required. Higher scores get better rates.

Overall, a Quicken Loans home equity loan provides a flexible way for homeowners to access their equity for cash needs. Make sure to carefully consider the costs and risks involved.

Quicken Loans Home Equity Line of Credit Overview

In addition to standard home equity loans, Quicken Loans offers home equity lines of credit (HELOCs). A HELOC works more like a credit card than a loan.

Key features of Quicken Loans’ HELOC include:

• Credit limit – You are given a maximum credit limit based on your available home equity, typically up to 85% of your equity.

• Draw period – You have an initial period where you can access the funds as needed, usually 10 years.

• Repayment period – After the draw period you enter the repayment period where no new funds can be drawn.

• Interest rates – The HELOC will have a variable interest rate tied to an index like the prime rate. The rate adjusts up and down over time.

• Payments – You only pay interest on the amount you actually use, not the full credit limit. Payments are usually interest-only during the draw period.

• Fees – Application fees, appraisal fees, and closing costs apply. There can also be annual fees.

• Tax deductibility – The interest may be tax deductible if used for home improvements. Speak to a tax pro.

HELOCs give you flexible access to home equity with interest-only payments. Make sure to budget carefully so the balance doesn’t get out of control.

Quicken Loans Home Equity Loan Uses

Quicken Loans’ home equity loans and HELOCs give you access to funds that can be used for any purpose. Here are some of the most common uses of home equity borrowing:

• Home improvements – Fund projects like a kitchen remodel, bathroom update, new roof, or swimming pool installation.

• Debt consolidation – Pay off higher interest debts like credit cards, personal loans, and medical bills.

• Major purchases – Finance large expenses like a wedding, family vacation, or college tuition.

• Emergency funds – Tap equity to cover unexpected costs like medical bills or major car repairs.

• Investments – Use equity to invest in real estate, a business, or other investments.

• College tuition – Pay for your children’s or your own college education costs.

• Loan down payment – Use equity to fully fund or supplement the down payment on a mortgage or auto loan.

The cash from a home equity loan or HELOC can be used for virtually any purpose. Focus on responsible uses that improve your financial situation.

Quicken Loans Home Equity Requirements

To qualify for a home equity loan or HELOC with Quicken Loans, there are some basic requirements to meet:

• Home equity – You’ll need at least 15% equity in your home to qualify for a HELOC or home equity loan. More equity provides larger loan access.

• Credit score – A FICO credit score of at least 620 is recommended. Higher scores may receive discounted rates.

• Debt-to-income ratio – Your total monthly debt payments, including the new home equity payment, should be less than 45% of your gross monthly income.

• Home value – There are no minimum home value requirements, but your equity must reach the minimum 15% of the value.

• Employment – Stable current employment and income are required. Self-employed borrowers can qualify with proper documentation.

As long as you meet these requirements, you should be in good shape to qualify. The more equity you have and the stronger your credit score, the better the terms you can receive.

How to Apply for a Quicken Loans Home Equity Loan

Applying for home equity financing through Quicken Loans involves a straightforward process:

1. Check your home equity

Calculate your estimated home equity by taking your home’s current market value and subtracting any mortgage debt. This gives you an idea of your potential borrowing power.

2. Review loan options

Decide if you need the fixed lump sum from a home equity loan or the revolving access of a HELOC. Quicken Loans offers both options.

3. Check your credit

Obtain a current copy of your credit report and check your credit scores. This gives you an idea of the rate you may qualify for.

4. Start your application

Complete Quicken Loans simple online application. You provide basic personal and financial information to start the process.

5. Submit documentation

Provide documents to verify your income, assets, and home value per the lender’s requests. This usually includes paystubs, bank statements, and a home appraisal.

6. Get loan approval

Quicken Loans will review your application and documents and issue a loan decision, typically within 1 week. Check your rate and terms.

7. Close on the loan

Once approved, you’ll complete final loan documents and the closing process. Then the loan funds will be distributed to you in a lump sum.

It’s easy to apply online or over the phone. Quicken Loans can guide you through every step of getting approved and accessing your home equity.

Pros and Cons of Home Equity Loans

Home equity loans offer many benefits, but also come with some downsides to consider:

Pros

• Provide substantial lump sums of cash
• Lower interest rates than credit cards or personal loans
• Interest may be tax deductible (consult a tax pro)
• Fixed monthly payment helps budgeting

Cons

• Closing costs and fees apply
• Uses home as collateral putting it at risk
• Loan balance can reduce future mortgage refinancing options
• Monthly payment adds to long-term debt load

Evaluate both the pros and cons before making your borrowing decision. A home equity loan gives you access to your equity now, but don’t take the risks lightly.

Alternatives to Home Equity Loans

Besides a home equity loan or HELOC, you may want to explore some other borrowing options:

• Cash-out refinance – Refinance your mortgage for a higher balance and receive cash. Adds to your primary mortgage.

• Personal loan – An unsecured loan with fixed payments. No home collateral needed but rates are higher.

• Credit cards – Revolving credit lines with variable rates. Easy to access funds but dangerous to carry balances.

• Family loan – Borrow from family members if possible. May get better terms but can cause relationship issues.

• 401(k) or IRA loan – Allows you to borrow against your own retirement savings and pay yourself back.

Each option has pros and cons to weigh. In many cases, a home equity loan strikes the right balance in providing access