HELOC Loans in Tennessee

Home Equity Line of Credit (HELOC)

Tennessee homeowners can leverage the value of their property through a HELOC (home equity line of credit), offering flexible access to funds during a multi-year draw period. Whether you're remodeling in Nashville, paying for college in Knoxville, or consolidating debt in Chattanooga, a HELOC gives you the freedom to borrow as needed. These loans typically require 15%–20% equity and a credit score of at least 620. Home equity loans, on the other hand, offer a fixed sum with set monthly payments—ideal for large, one-time expenses. Tennessee lenders, including credit unions and community banks, provide competitive terms with personalized service.

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How to qualify

To obtain a quote, we will need the following information:

Property Value and

 Purchase Price


Down Payment

Amount


Credit Score

 Asset Types

  • Single Family Homes
  • Townhomes
  • Condos
  • 2 - 4 Units (Duplex, Triplex, Quadplex)
  • Multi-Family: 5 - 8 Units
  • Mixed-Use: 2 - 8 Units
  • Multi-Family: 9+ Unit


Loan Terms

  • Loan Sizes: $100k up to $3.5 Million (Larger loan sizes available on a case by case basis)
  • Purchase LTV: Up to 85%
  • Rate & Term Refinance LTV: Up to 80% 
  • Cash Out Refinance LTV: Up to 80%
  • Amortization: 30 Year % 40 Year Amortization Options Available
  • Term Lengths: 5/6 ARMs, 7/6 ARMs, 10 Year Interest Only, 30 Year Fixed & 40 Year Fixed
  • Floor Rate: 5.50% (subject to change daily due to market volatility)
  • Full Recourse with personal guarantee required for all borrowers with majority ownership (typically 20%+ or 25%+ if closing in an Entity)
  • DSCR Requirement: 1.00x or greater depending on loan size and property type. Sub-1.00x DSCR and NO DSCR options available.
  • Vesting: Lending to Individuals, LLCs, and Corporations. Trusts Allowable on a Case by Case Basis.
  • Average Time to Close: 14 to 35 days

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Frequently Asked Questions

What is a HELOC and how does it differ from a home equity loan?

A HELOC in Tennessee is a revolving credit line secured by your home. It allows for flexible withdrawals and repayments during the draw period. In contrast, a home equity loan provides a one-time disbursement with fixed payments. Choose a HELOC for ongoing expenses and a loan for fixed costs.

How do HELOC rates work and what affects the interest rate?

HELOC rates in Tennessee are typically variable and influenced by the prime rate, your credit score, income, equity amount, and lender guidelines. Many Tennessee lenders offer fixed-rate conversion options or intro APRs. Always compare offers to find the best rate, fees, and repayment terms.

Can I qualify for a home equity loan in Tennessee with low credit?

Yes, Tennessee homeowners may qualify for a home equity loan with lower credit, particularly if they have strong equity and reliable income. While most lenders prefer credit scores above 620, some credit unions may accept scores in the 580–620 range. Expect higher interest rates and more documentation.

How much equity do I need in my home to get a HELOC?

In Tennessee, most lenders require at least 15%–20% home equity, which means your mortgage should not exceed 80%–85% of your property’s value. Lenders will also assess income, credit score, and current debts to determine eligibility.

Are home equity loans in Tennessee better for large expenses?

Yes, home equity loans in Tennessee are well-suited for major one-time expenses like home improvements, weddings, or medical bills. These loans offer fixed interest and predictable monthly payments. For recurring or flexible expenses, a HELOC may be a better fit.

What are typical equity rates and loan terms in Tennessee?

In Tennessee, HELOC APRs generally range from 7% to 10%, based on credit score, loan-to-value ratio, and lender criteria. HELOCs typically offer a 10-year draw period followed by a 10- to 20-year repayment period. Home equity loans come with fixed rates and terms from 5 to 30 years.

Taking a broader view? Compare equity lending programs in Kentucky , Georgia , North Carolina , and Alabama for additional regional opportunities.