To consolidate debt with home equity you generally need enough equity (cash-out caps near 80% LTV), credit usually 620+, verifiable income, and a workable DTI. Tools include cash-out refinance, HELOC, or a home equity loan.
The core idea
You replace high-interest debt (cards, personal loans) with lower-rate financing secured by your home, cutting your total monthly payment. Requirements mirror the tool you use — cash-out refi, HELOC, or home equity loan.
What lenders check
Lenders verify equity, income, credit, and DTI. Paying off revolving balances at closing can actually lower your DTI, sometimes improving your qualification.
| Requirement | Typical |
|---|---|
| Equity | Enough for the chosen tool |
| Credit | ~620+ |
| Income | Verifiable; DTI reviewed |
| Tools | Cash-out / HELOC / Home equity loan |
Frequently asked questions
How does consolidating with equity work?
You borrow against your home at a lower rate and pay off higher-rate debts, replacing several payments with one lower one.
Which tool should I use?
Cash-out refinance, HELOC, or home equity loan — depending on your current mortgage rate and needs. We’ll compare them.
Will it lower my credit score?
Paying off cards can help utilization over time; there’s a small temporary dip from the inquiry and new account.
Save Financial is a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766). Figures are illustrative for 2026 and not an offer of credit.