How much net income do I have to have to qualify for a home equity line of credit?
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October 13th, 2009 at 8:44 am
The loan company will look at your debt to income ratio in deciding whether to give you a loan. When qualifying for an initial mortgage, they usually don’t let you go over approximately 40% of gross income (before taxes) when combining your mortgage payment, credit card payments (for revolving/carried balances), and auto payments.
So if your HELOC payment combined with your mortgage, credit card payments, and auto payments takes you over 40% of your gross salary, you are entering dangerous financial territory.
HELOCs are fine if you wisely manage your finances. As the top poster stated, you put your home at risk if you can’t make the payments. However, with a HELOC, interest might be tax deductible (see your tax accountant). You also get to stretch your payments out over many years and get a lower interest rate due to the collateral offered.
Do not use your house as a piggy bank without a solid financial plan.
October 13th, 2009 at 8:44 am
Never get a HELOC. If you put that money on your house and you can make the payments they will take your house.
The goal is to pay off your house and not add to the debt.