"Who is most likely to get a home equity loan?"

[Gollum]

"In the third quarter of 2024, lenders denied HELOCs to nearly half of the applicants — almost three times the rejection rate of conventional mortgage loans. Criteria tend to be tougher for home equity loans, too."

and

"Lenders typically prefer a CLTV [Combined Loan To Value] of 80 percent at the most. However, according to the latest Mortgage Bankers Association (MBA) data, the average CLTV for home equity loans and HELOCs is much lower — 62 percent and 53 percent, respectively, in 2023."

and

"...home equity loan income qualifications can be challenging for baby boomers. Although they’re the most equity-rich generation, many are now retirees, living on fixed incomes..."

https://komonews.com/money/mortgages/best-person-to-take-out-home-equity (03-10-2025) Cookies required.

[TrapLine]

Did a Home Equity Line of Credit to replace a flood washed out retaining wall of $20,000 (2023). The bank had the house re-appraised and I came in at 80%. Used a local bank where the banker/owner knew me and I believe that helped (relationship and already a customer).

Purpose of the HELOC was to reuse it for internal cosmetic updates. Rate was average and I was a Baby-Boomer which in the banker's mind was a plus (proven track record).

[Realist]

There's a time and place for everything.  This is not a time to be acquiring a home equity loan, in which serves as a 2nd or maybe even a 3rd on the home.  That's going to be equity driven of course, where as someone that has a mostly, or much paid off home, will have little issue when compared to the average homeowner with less equity.  The banks are denying HELOC loans because they understand what comes next in this market cycle.

If we recall from the 2008/2009 events, homes were falling underwater much of the time just on the first mortgage.  Home equities were being frozen or eliminated during that timeframe.  We are entering into a timeframe where housing valuations are stalling, interest rates are elevated, and neither have yet given in.  One will break, and its likely the housing prices first, and then repreive in the form of interest rates to help offset the calamity.  The inflationary pressures of valuation, against the elevated interest rates, should not exist as we see them.  One has to give.