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How to Access Your Home Equity Without a Great Credit Score

Having a great credit score most of the time guarantees approval for any loans you apply for but for low-score borrowers, it may be a challenge but not impossible!

Homeowners looking happy after accessing their home equity even though they have a low credit score


Here are the steps you can take:

  1. Know your Credit Score
  2. Calculate LTV
  3. Calculate DTI
  4. Shop around options!

Accessing home equity is a hot topic among homeowners we work with — whether for retirement, home improvement, to consolidate debt, make an investment, or pay an unexpected expense. Homeowners with mortgages have about $207,000 in equity, on average, that they could access while still keeping a 20% equity buffer…at or near an all-time high!

First, check and confirm your credit score

Even if it’s not ideal, your score may be good enough to get a line of credit or other loan product. Get your free score here to see what it actually is.

Then, Calculate your loan-to-value (LTV) ratio

Look at your mortgage website to see how much is still owed on your loan. Then, divide that by the estimated value of your home. This will be your LTV ratio, and it impacts how much equity is available to you. House Numbers will calculate your LTV in your homeowner dashboard.

And, calculate your debt-to-income (DTI) ratio

Your DTI is the percentage of your gross monthly income that you need to use to make your minimum, required debt payments. First, add up all your monthly debt payments: your mortgage payment, minimum credit card payments, car payments, student loan payments, child support, etc. Then, divide that by your total, gross monthly income (without deducting taxes or anything else). House Numbers will calculate your DTI in your homeowner dashboard.

Shop around: a home equity line of credit (HELOC)

Some general guidelines but, there are exceptions, so let us help:

  • DTI should be 43% or less; sometimes 50% or higher is ok.
  • Generally a credit score of 660–680, but sometimes 620 or lower.
  • Access up to 85% of your home’s value, but this may be as much as 95% or as low as 70%.

You’ll especially want to pay attention to the interest rate, whether it’s variable or fixed, if discounts are available, and what are the repayment and amortization periods.

Shop around: an equity investment

Think of home equity as wealth, not spending money. So, my rule is that wealth should be used to build more wealth — whether by saving money or investing in an asset that is going to increase in value. I love experiences and nice things as much as anyone. But, I stand firm that we should set aside income to save for those, separately.

Shop around: if you’re 55 or older, a reverse mortgage

A reverse mortgage is a great option for many circumstances, allowing you to eliminate your monthly mortgage payment and often access cash, which is then usually repaid from other assets or from selling your home after you and your spouse pass away. Because there is no monthly payment, credit score is not typically a factor — you just have to be able to pay for home maintenance, property taxes and insurance.

This is a lot of legwork — let us help for free and with no obligation!

At House Numbers, our team specializes in helping you find the best option from dozens of providers based on your unique situation.

Disclaimer: The above is provided for informational purposes only and should not be considered tax, savings, financial, or legal advice. All information shown here is for illustrative purpose only and the author is not making a recommendation of any particular product over another. All views and opinions expressed in this post belong to the author.

Jeff Levinsohn

Written By Jeff Levinsohn

Jeff is the CEO of House Numbers and a home wealth management geek. He’s obsessed with tools and information that empower homeowners to save money, access their home equity, and build long-term wealth.