On average, a typical U.S. homeowner is sitting on roughly $200,000 worth of equity. This represents nearly $30 trillion in tappable funds nationwide — a 64% increase compared to five years ago. However, nearly half of homeowners don’t meet home equity loan requirements. What do lenders expect before they’ll approve you for an equity-backed loan? In this post, we’ll share the six key criteria to qualify for a home equity loan or home equity line of credit (HELOC). We’ll also provide real-world loan examples and a list of alternative options that might work for you. A home equity loan allows you to borrow against the equity in your home, offering a lump sum with fixed interest rates and set repayment terms. This option is ideal if you need a specific amount for a major expense. On the other hand, a Home Equity Line of Credit (HELOC) is a revolving credit line based on your home’s equity. You can borrow as needed, up to a certain limit, with variable interest rates. It provides flexibility, especially for ongoing expenses. Both of these lending options are considered a second mortgage that adds another mandatory monthly payment to your finances.What is a home equity loan and HELOC?