Does a HELOC have different rules than a cash-out?

Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.

Income & Employment Requirements

Understanding income & employment requirements up front prevents surprises in underwriting. The 2026 specifics are below.

The rule for 2026

There is no fixed income minimum; lenders verify that your income comfortably supports the new payment within DTI limits. Expect to document two years of stable income via W-2s, pay stubs, or tax returns for self-employed borrowers. Reliable, documentable income matters more than a specific dollar amount.

Lenders set their own overlays on top of the basics. Meet the standard below first, then confirm whether your lender layers anything extra.

Documentation you'll typically need

Recent pay stubs and two years of W-2s or returns
Two months of bank statements
Your current mortgage statement and homeowners insurance
A recent appraisal or automated valuation

Equity rules are periodically revised. Join the alerts to be told before changes affect your file.

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Frequently Asked Questions

Income & Employment Requirements — the bottom line for 2026?: There is no fixed income minimum; lenders verify that your income comfortably supports the new payment within DTI limits. Expect to document two years of stable income via W-2s, pay stubs, or tax returns for self-employed borrowers. Reliable, documentable income matters more than a specific dollar amount.
Does a HELOC have different rules than a cash-out?: Yes — HELOCs and home equity loans allow up to ~85% CLTV and often skip a full appraisal, while a cash-out refinance caps at 80% LTV and resets your first mortgage.