A home equity loan can make more financial sense than charging recurring purchases to credit cards or taking out a personal loan, especially if you can get a low, fixed rate and take advantage of tax deductions. But borrowing against your equity stake does carry risks that you should consider carefully before deciding to do it. More info emprestimo home equity

A traditional home equity loan works similar to a conventional mortgage: you borrow up to 85% of the value of your home minus what you owe, receive the money in one lump sum and pay back what you borrowed with monthly payments that include principal and interest. You may also choose a home equity line of credit (HELOC), which functions more like a credit card and can be used repeatedly as long as you have sufficient available equity.

How to Qualify for a Home Equity Loan in 2025

To qualify for a home equity loan, lenders will generally check your credit score and history, employment information, monthly income and debts. They will look for a reasonable debt-to-income ratio, which helps them determine your ability to handle an additional monthly payment. You can improve your chances of qualifying for a home equity loan by paying down any outstanding balances and lowering your overall debt-to-income ratio before applying.

It’s usually not a good idea to use a home equity loan for short-term cash-flow needs or to help resolve everyday money shortages in your household or living budget, Sexton says. After all, if you fail to keep up with your payments, your lender can foreclose on your home. You’re better off leveraging home equity for larger, more expensive goals such as remodeling or paying for higher education.