Caleb Adams
Licensed Mortgage Broker
If you own a home in Utah, there is a good chance you have more equity than you did a few years ago. A home equity line of credit, or HELOC, is one of the most common ways to put some of that equity to work without touching your first mortgage. But the questions I hear most are practical ones: how much can I actually borrow, what do I need to qualify, and is a HELOC even the right tool?
I’m Caleb Adams, a mortgage broker based in North Logan, licensed in Utah, Idaho, and Texas. This guide covers how HELOCs work in Utah in 2026, how lenders size your line, what they look at to approve you, and when a different loan makes more sense.
The CFPB describes a HELOC as an “open-end” line of credit that lets you borrow repeatedly against your home equity. You get a credit limit, draw what you need during the draw period, and pay interest on what you have drawn, not on the full limit. Your home is the collateral. That last part matters: the CFPB is clear that if you fall behind or cannot repay, you could lose your home.
A HELOC is usually a second lien. Your current first mortgage stays exactly as it is, including its rate. That is the main reason HELOCs are popular right now with homeowners who locked in a low rate on their first mortgage.
Lenders size a HELOC using combined loan-to-value, or CLTV. That is the total of all loans against the home, divided by the home’s value.
The formula is simple:
Many lenders cap CLTV around 85%. Experian says most lenders let you borrow up to about 85% of your home’s value including all outstanding mortgages, with some going higher. At least one Utah bank publishes that many of its HELOC borrowers qualify for a CLTV up to about 85%. Some lenders go to 90% or more, usually with stricter credit requirements or higher pricing, and many reserve their best pricing for lower CLTVs.
These numbers are made up to show the math. They are not an offer or a quote.
| Item | Hypothetical amount |
|---|---|
| Home value | $520,000 |
| Max CLTV (85%) | $442,000 |
| Current mortgage balance | minus $300,000 |
| Maximum possible HELOC | $142,000 |
At an 80% CLTV the same homeowner would have a maximum line of $116,000. At 90%, it would be $168,000. The CLTV cap a lender uses changes your number more than almost anything else, which is one reason it pays to shop.
Keep in mind this is the maximum the equity supports. Your income and debts can limit you to a smaller line.
You need enough equity that your first mortgage plus the new line stays under the lender’s CLTV limit. Most lenders will order an appraisal or use an automated valuation to confirm your home’s value.
Requirements vary by lender. Experian notes most lenders look for a FICO score of at least 680, and some want scores above 720. Higher scores generally unlock higher CLTVs and better pricing, and a lender’s best advertised pricing often requires both a high score and a lower CLTV.
Your debt-to-income ratio (DTI) is your monthly debt payments divided by your gross monthly income. Experian says lenders generally prefer a DTI below 43%. Lenders count the HELOC payment in that calculation, and some qualify you using a payment on the full line, not just what you plan to draw.
Expect to provide pay stubs, W-2s, or tax returns. Self-employed borrowers are usually asked for tax returns as well. Retirees can use Social Security, pension, and retirement account income with the right documentation.
Primary residences get the widest range of options. HELOCs on second homes and rentals exist but are less common and usually have lower CLTV limits.
Every HELOC has two phases.
The jump from draw to repayment is the part people underestimate. If you draw a large amount and only pay interest for ten years, your payment can rise sharply when repayment starts. Plan for it from day one.
The CFPB notes most HELOCs have a variable rate made up of an index, such as the prime rate, plus a margin the lender adds. When the index moves, your rate and payment move with it. When comparing offers, look at:
I don’t publish rates in articles because they change, and your rate depends on your credit, CLTV, and the line amount.
The CFPB lists fees that can come with a HELOC:
Some lenders advertise “no closing costs” but add an early termination fee or a higher margin. Compare the full picture. Federal law also gives you three business days after opening a HELOC on your primary home to cancel and get your fees back.
The CFPB notes that HELOCs generally let the lender freeze or reduce your credit line if your home’s value falls or your financial situation gets worse. If you are counting on the line as an emergency fund, know that it may not be there in the exact scenario you are worried about.
A HELOC is not always the right answer. Here is how I think about the alternatives:
A HELOC tends to fit best when you want flexibility: a project with uncertain costs, spending spread over time, or a standby line you may or may not use.
It depends on the lender’s maximum CLTV. At an 85% limit, your first mortgage plus the HELOC can total up to 85% of your home’s value, so you need more than 15% equity to have anything to borrow. Some lenders go higher, often with tighter credit requirements.
There is no single minimum. Experian notes most lenders want at least a 680, and some look for over 720. Higher scores usually mean better pricing and access to higher CLTVs.
No. A HELOC is usually a separate second lien. Your first mortgage rate, balance, and payment stay the same.
Most HELOCs have variable rates based on an index like the prime rate plus a margin, so your payment can change. Some lenders let you lock part of your balance at a fixed rate.
You stop being able to borrow and begin repaying principal and interest. The CFPB notes payments are often significantly higher in the repayment period. Some HELOCs require a balloon payment instead.
Yes. The CFPB says HELOCs generally allow the lender to freeze or reduce the line if your home value falls or your finances change for the worse.
If you own a home in Utah and want to know what your equity could support, and whether a HELOC, second mortgage, or cash-out refinance fits your goal best, book a call with me. I’ll run the numbers with you and give you a straight answer.
Caleb Adams, NMLS #2281316. First Class Home Mortgage, NMLS #1843. Terms, programs, and eligibility vary; not all applicants will qualify. This is not a commitment to lend.