Updated: November 16, 2024
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The best home equity line of credit (HELOC) lender in Minnesota is Bank of America with a MoneyGeek score of 94 out of 100, followed by BMO BANK with a MoneyGeek score of 94 out of 100.
The average HELOC limit in Minnesota is $94,954. How much you can borrow depends on your home's equity, outstanding mortgage balance, and credit score.
Comparing rates can help find suitable lenders. MoneyGeek compiled the best HELOC rates in Minnesota, updated weekly to assist you.
The average HELOC balance in Minnesota for the third quarter of 2023 is $31,189, according to Experian. Calculating your HELOC payments is important to manage this type of debt effectively and plan for any financial adjustments.
Use our HELOC payment calculator to estimate your monthly payments based on the amount drawn, APR, and loan terms. The full amortization schedule provided shows how much of your payments go toward interest and principal over time.
This HELOC payment calculator assumes that you take out one lump sum at the start of your interest-only period. Your actual payoff schedule will vary depending on your interest rate and market conditions.
Draw Period Payment
Repayment Period Payment
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HELOCs are a popular choice for homeowners in Minnesota due to their flexibility and control over borrowing and repayment options. With a HELOC, you can decide how much of your credit line to use and when, making it a versatile financial tool.
There are several ways you can use a HELOC, from funding home improvements to consolidating debt or covering educational expenses. Understanding these options can help you maximize the benefits of your HELOC.
Home Improvements or Renovations
A HELOC is ideal for home improvements, offering flexibility as costs change. It allows you to fund projects without final costs, ensuring your home evolves with your needs.
Consolidating High-Interest Debt
With average 2023 consumer debt in Minnesota at $106,981, a HELOC can simplify debt consolidation, potentially lowering interest rates and streamlining payments.
Funding Education Expenses
HELOCs offer better terms for education expenses like tuition, books, and supplies compared to other debts, making them a smart choice for funding your educational journey.
Investment Properties
Using a HELOC for investment properties can yield returns, but it's vital to shop around for the best HELOC lenders for investment property to secure favorable rates and terms.
Understanding the steps to apply for a HELOC in Minnesota can make the process smoother and more manageable. Below, we've broken down this journey into six steps to guide you through.
Reviewing your current financial situation is key to understanding your credit score, debt-to-income ratio, and home equity. In Minnesota, the average credit score is 742 in the third quarter of 2023 based on Experian data. This score can enhance your chances of HELOC approval.
Comparing rates in Minnesota can help you secure the best HELOC deal. Look into lender features such as repayment terms, fees, and the option for a fixed-rate HELOC. These factors can significantly impact the overall cost and flexibility of your loan.
Preparing the necessary documents for a HELOC application can streamline the process. Commonly required documents include proof of income, recent tax returns, and information on your mortgage and home value. Having these ready can prevent delays and ensure a smoother application experience.
Most lenders offer the convenience of applying online, though in-person applications are also an option if your lender has a branch. Ensure all information is accurate and complete to avoid delays. Double-check for errors or omissions before submitting your application.
Some lenders may require a home appraisal to determine your home's current market value. A home appraisal involves an assessment by a professional to establish the worth of your property, which can influence the amount you are eligible to borrow.
The approval process for a HELOC can take between two to six weeks. Once approved, you'll proceed to the closing process, which may involve signing documents and paying closing costs. Some lenders might cover part of your closing costs, so it's worth inquiring about this option.
The average HELOC limit in Minnesota is $94,954, according to Experian's data for the third quarter of 2023. The maximum amount you can borrow with a HELOC is generally tied to the equity you have in your home. The more equity you have, the higher your potential credit limit.
Check out the table below to see the range of credit lines offered by Minnesota lenders in our database.
| Bank of America | $15,000 to $1,000,000 |
| Old National Bank | $10,000 to $1,000,000 |
| U.S. Bank | $25,000 to $750,000 |
When choosing a lender for a HELOC, a local bank or credit union may not charge you as many fees as an online lender or mortgage broker (if they charge you any fees at all). Usually you just need to pay for the appraisal fee, which can be anywhere from $150 to $500. Although an online lender may advertise a better rate, if it’s charging thousands of dollars in fees, it may not be the best financial decision to take the perceived lower rate.
Bank of America is the best HELOC lender in Minnesota with a MoneyGeek score of 94 out of 100. It excels in customer service and education, has an efficient application process and quick approval turnaround, and is credible and transparent about its HELOC terms and process.
A bad credit score is generally below 580 for FICO scores and between 300 and 600 for VantageScore. When looking for the best HELOC lenders for bad credit, consider factors like flexible eligibility criteria, willingness to work with low credit scores, and reasonable interest rates and fees.
Consider interest rates, fees, borrowing limits, repayment terms, and lender reputation when choosing a HELOC lender in Minnesota.
Common fees associated with HELOCs include origination fees, annual fees, application fees, and early closure fees.
The typical draw period for HELOCs is 10 years, but some lenders may offer more flexible options.
Look for lenders that offer fixed-rate HELOC options or allow interest-only payments during the draw period.
MoneyGeek's scoring system offers a comprehensive overview of how each lender performed in areas that matter most to borrowers. Scores were allocated based on the inclusion or exclusion of certain desirable features in various critical categories.
Our analysis was completed in November 2024 and considered different banks and credit unions in California from S&P Global's SNL Depository Rates dataset.
About Zachary Romeo, CBCA
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.
Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.
