How To Apply For A Home Equity Line Of Credit (HELOC) In 6 Simple Steps

Oct 10, 2024

4-minute read

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A home equity line of credit (HELOC) is one of the main ways homeowners can tap into their equity. Borrowers can use these funds for almost anything from home improvements to debt consolidation.

To apply for a HELOC, you’ll need to make sure you meet the basic requirements, confirm it’s the right loan option for you and follow the steps below.

Rocket Mortgage® does not currently offer HELOCs.

Should You Apply For A HELOC?

Before applying for a HELOC versus a home equity loan, homeowners should consider several factors to ensure they’re making an informed and responsible decision. Of course, there are pros and cons to HELOCs. Here are some questions to ask yourself before committing:

  • Do you have a defined purpose for the funds? Whether it’s for home improvements, debt consolidation or something else, homeowners should have a specific plan for what to do with the funds before applying for a HELOC. It’s too big of a financial commitment to make without a concrete purpose.
  • Do you meet the eligibility requirements? We’ll cover them in more detail in the next section. But before moving to apply for a HELOC, make sure that you can qualify for one. Otherwise, your efforts might be better suited in improving your financial standing.
  • Do you know how much you want to borrow? Due to the flexibility of HELOCs you may be tempted to make multiple withdrawals over the draw period. Make sure you go into the process with an idea of how much you need so that you don’t take on more debt than you must.
  • Will you be able to repay what you borrow? Taking on debt comes with risks. Make a plan to pay it back before you take it out. If you can’t make the monthly payments, you could risk defaulting which would damage your credit score and could even result in foreclosure.
  • Have you explored the alternatives? HELOCs aren’t the only way to access your equity. Rocket Mortgage offers home equity loans and cash-out refinances. Make sure to explore these options before committing to a HELOC.

See What You Qualify For