Finding the Best Home Equity Line of Credit Rates from Quicken Loans

Home equity lines of credit, also known as HELOCs, allow homeowners to tap into their home equity to access funds for projects, investments, or other needs HELOCs offer lower interest rates compared to other financing options like credit cards or personal loans, making them an attractive borrowing choice for many homeowners As one of the largest mortgage lenders in America, Quicken Loans offers competitive HELOC rates to its borrowers. This article provides an in-depth look at Quicken Loans’ HELOC rates, how they are determined, and how you can find the best rates for your situation.

A HELOC works like a credit card with a credit limit based on the amount of equity you have built up in your home. Equity refers to the current market value of your home minus what you still owe on your mortgage. For example, if your home is worth $300,000 and you have $150,000 left on your mortgage, you have $150,000 in equity.

With a HELOC, you can access a portion of that equity as a line of credit to withdraw funds as needed until you reach your credit limit. HELOCs come with a set draw period, usually 10 years, where you can access the funds. After the draw period ends, the HELOC enters a repayment phase where you can no longer withdraw money and must pay back the principal plus interest.

The big advantage of HELOCs is that you only pay interest on the amount you actually withdraw, not the entire credit limit. This provides flexibility to borrow money as needed for large expenses without taking on unnecessary interest costs.

How Quicken Loans Determines HELOC Rates

The specific HELOC rates you receive from Quicken Loans depend on certain factors related to your financial profile and the current market conditions:

Your credit score As with any lending product your credit score plays a major role in determining your interest rate. The higher your score the better HELOC rate you can qualify for. Maintaining good credit is key to getting the lowest rates.

Loan-to-value (LTV) ratio: Your LTV ratio compares how much you owe on your mortgage to the value of your home. The lower your LTV, the more equity you have built, which allows Quicken Loans to offer better rates. Keeping your LTV low by paying down your mortgage can help reduce your rates.

Equity amount: The more equity you have available, the more competitive rates Quicken Loans can provide. Having substantial equity signals you as less risky for the lender.

Market interest rates: HELOC rates from Quicken Loans are variable and tied to market indexes like the prime rate. When these benchmarks rise or fall, your HELOC rate will adjust accordingly. Rates tend to be low when the markets are favorable.

Loan term: Opting for a longer HELOC term (e.g. 20-30 years) generally allows Quicken Loans to offer a lower interest rate. However, you end up paying more total interest over the life of the loan with a longer term.

Your financial profile: Beyond just your credit score, Quicken Loans looks at factors like your income, existing debts, and employment history to determine your rates. The stronger your overall financial profile, the better your chances for getting low HELOC rates.

By understanding these factors, you can take steps to improve your rates such as increasing your credit score paying down your mortgage, or negotiating your equity amount with Quicken Loans. Rates can vary significantly by lender, so shopping around is wise.

Comparing Quicken Loans’ Current HELOC Rates

As a major lender, Quicken Loans offers competitive HELOC rates to borrowers across a range of financial situations. Here is a snapshot of their current rates for variable-rate HELOCs as of July 2024:

For excellent credit (scores 720+):

• 10-year draw term: Rates from 6.25% – 7.00%
• 20-year draw term: Rates from 6.50% – 7.25%

For good credit (scores 680-719):

• 10-year draw term: Rates from 6.75% – 8.25%
• 20-year draw term: Rates from 7.00% – 8.50%

For fair/average credit (scores 640-679):

• 10-year draw term: Rates from 8.50% – 10.25%
• 20-year draw term: Rates from 8.75% – 10.50%

For borrowers with less-than-ideal credit, Quicken Loans offers HELOCs through its Rocket HELOC product. These rates tend to be significantly higher than their traditional HELOCs:

For poor credit (scores <640):

• 10-year draw term: Rates from 15.25% – 18.00%
• 20-year draw term: Rates from 15.50% – 18.50%

As you can see, having excellent credit can make a huge difference in the HELOC rate you receive from Quicken Loans. Even small differences in your credit score can impact your rate if you are on the edge of a credit tier.

Comparing Quicken Loans HELOC Rates to Other Lenders

How do Quicken Loans’ HELOC rates stack up against competitors? Here is a comparison of rates from major lenders:

For excellent credit:

• Quicken Loans: 6.25% – 7.25%
• Wells Fargo: 5.50% – 6.50%
• Bank of America: 5.75% – 6.75%
• Chase: 6.00% – 7.00%

For good credit:

• Quicken Loans: 6.75% – 8.50%
• Wells Fargo: 6.25% – 7.50%
• Bank of America: 6.50% – 8.00%
• Chase: 6.50% – 8.25%

For fair/average credit:

• Quicken Loans: 8.50% – 10.50%
• Wells Fargo: 7.75% – 9.75%
• Bank of America: 8.25% – 10.00%
• Chase: 8.00% – 10.25%

Based on these rate ranges, Quicken Loans offers very competitive HELOC rates, especially for borrowers with excellent or good credit. In some cases, their rates beat out even the large national banks. However, for fair or average credit, regional banks and credit unions may offer better rates.

This highlights the importance of shopping around to find the best rates for your particular financial situation. While Quicken Loans offers solid rates, you may find another lender able to beat them.

Tips for Finding the Best HELOC Rates from Quicken Loans

Here are some tips to help you find and qualify for the lowest HELOC rates possible from Quicken Loans:

• Have excellent credit. Improving your credit score should be priority number one. Shoot for a minimum score of 720 before applying. Pay all bills on time and reduce credit card balances.

• Shop for rates frequently. HELOC rates change often. Check back with Quicken Loans regularly to find rate promotions and discounts. Consider applying when rates drop.

• Increase your equity. Making extra mortgage payments to build your equity before applying can help reduce rates. Aim for at least 20% equity if possible.

• Lower your LTV. Paying down your mortgage balance decreases your LTV ratio, making you eligible for better HELOC rates. Get your LTV below 70% for best rates.

• Extend the term. Opting for a 20-year vs. 10-year draw period comes with lower rates. Just be aware it extends the repayment period.

• Have sizable available equity. Lenders reward big equity amounts with their lowest rates. Consider taking a smaller HELOC if your equity is limited.

• Set up autopay. Enrolling in autopay from a Quicken Loans checking account can earn you a rate discount. Just make sure you have funds to cover payments.

• Check for promotions. Monitor for seasonal promotions or limited-time rate specials. Applying during these can score significant savings.

With some preparation and savvy rate shopping, you can find the absolute lowest HELOC rates available from Quicken Loans. A few basis points of savings can mean thousands of dollars over the life of your line of credit.

Next Steps to Getting a Quicken Loans HELOC

Once you decide a HELOC is right for you, here are the next steps to take when getting one through Quicken Loans:

1. Check your credit score and report. Identify any issues that may impact your rate and address them ahead of time if possible.

2. Determine your home equity amount. Calculate your estimated home value minus mortgage balance to see how much equity you have.

3. Compare rates and offers from lenders. Shop around with multiple lenders beyond just Quicken Loans to find the best rate.

4. Gather necessary financial documents. This includes proof of income, tax returns, mortgage statements and anything else needed to apply.

5. Submit your HELOC application. Apply online at Quicken Loan’s website or work with a Mortgage Banker to receive rate quotes.

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