Last updated: November 2025
Quick Answer
Yes, most HELOCs require an appraisal to verify your home’s current market value. The appraisal helps determine how much equity you have and how much you can borrow.
Some lenders accept automated or drive-by valuations, but others require a full in-person appraisal, especially if you’re borrowing a large amount.
What is a HELOC?
A home equity line of credit (HELOC) is a revolving line of credit that lets you borrow against the equity in your home. You can draw funds as needed—typically for up to 10 years—and repay them over time, often with interest-only payments during the draw period.
Because the loan is secured by your home, lenders assess your equity, credit, and overall financial profile before issuing approval.
Read more: What is a HELOC?
Access cash within days
Tap into your home’s potential in minutes. Start our streamlined digital application to discover if a HELOC is right for you.
Why lenders require an appraisal for a HELOC
The amount you can borrow with a HELOC depends on your available home equity.
To calculate this, lenders subtract your current mortgage balance from your home’s appraised value and apply a loan-to-value (LTV) cap, typically 85% or less.
Formula
Appraised home value × 85% – current mortgage balance = maximum HELOC amount
Example
- $400,000 home × 85% = $340,000
- $340,000 – $260,000 mortgage = $80,000 potential HELOC
Without an accurate property value, lenders can’t calculate your borrowing limit or risk exposure. This is why most require an appraisal as part of the approval process.
Learn: How does a HELOC work?
Types of appraisals used for a HELOC
Not all appraisals are the same. Depending on your lender and loan size, they may use one of the following methods:
1. Full appraisal (in-person)
A licensed appraiser visits your home, evaluates its condition and upgrades, and compares it to recently sold similar homes. This is the most accurate option, but also the most time-consuming.
2. Drive-by appraisal
An appraiser estimates your property’s value based on exterior inspection and public data. Faster and cheaper, but less detailed.
3. Desktop appraisal or AVM (Automated Valuation Model)
No physical visit is made with an AVM. Value is determined using online tools, algorithms, and public sales data. Often used for smaller loans or low-risk borrowers.
| Appraisal type | Physical visit? | Accuracy | Common usage |
|---|---|---|---|
| Full appraisal | Yes | High | Large HELOCs, high LTV |
| Drive-by | Exterior only | Medium | Moderate loan amounts |
| Desktop/AVM | No | Low–Med | Low loan amounts, fast approval |
Learn: Use our HELOC calculator.
Can you get a HELOC without an appraisal?
In rare cases, yes. Some lenders may waive the appraisal requirement if:
- You have a recent home valuation on file
- The loan amount is small
- The lender uses a reliable automated valuation system
- Your LTV is well below the limit
However, skipping the appraisal may reduce your approved credit limit or increase your interest rate due to higher perceived risk.
Read more: How to apply for a HELOC.
What happens if the appraisal comes in low?
If your home is appraised below expectations, your borrowing power decreases. A lower value increases your loan-to-value (LTV) ratio, which may:
- Reduce your approved HELOC amount
- Require additional documentation
- Lead to loan denial if the equity threshold isn’t met
To prepare, check online value estimators, review recent neighborhood sales, and consider home improvements before the appraisal.
Appraisal fees and timing
HELOC appraisals aren’t free. You’ll typically pay between $300 and $600, depending on:
- Location
- Property size and type
- Appraisal method
Most appraisals are completed within 7–10 business days. Lenders won’t finalize your HELOC approval until the appraisal is complete and reviewed.
How appraisals protect both borrower and lender
While an appraisal may seem like a hurdle, it helps ensure:
- Fair loan amounts: You don’t borrow more than your home supports
- Better terms: Accurate valuations lead to better rates and approval odds
- Equity protection: Prevents overleveraging your property
Appraisals serve as a financial checkpoint, making sure your loan aligns with your actual equity.
Appraisals set the stage for successful HELOC approval
An appraisal is a common, often required step in the HELOC process.
Whether it’s a full walk-through or a desktop estimate, it helps lenders determine your credit limit and safeguard both parties. In most cases, having a recent, accurate valuation improves your odds of approval and favorable terms.
If you’re considering a HELOC, understanding the appraisal requirement is key to setting realistic expectations and maximizing your borrowing power.
Whether your lender requires a full in-person appraisal or uses a desktop valuation, the purpose is to accurately assess your home’s value and protect your financial position.
Preparing for the appraisal by knowing your home’s market value and addressing needed repairs can lead to better terms and a smoother approval process.
Ready to see how much equity you can access? Check your HELOC rate in minutes.
FAQ: HELOC appraisals
Q: Do all HELOCs require an appraisal?
A: Most do, but some lenders may waive the requirement for low-risk borrowers or small loan amounts. Always ask about your lender’s policy.
Q: What kind of appraisal is used for a HELOC?
A: It depends on the loan size and risk profile. Full appraisals are common, but some lenders use drive-by or automated valuations.
Q: How long does a HELOC appraisal take?
A: Typically 7–10 business days. Desktop and AVM appraisals are faster, while full appraisals take longer.
Q: Will I be charged for the HELOC appraisal?
A: Yes. Fees usually range from $300 to $600, depending on the property type and location. This cost is often paid up front.
Q: Can I dispute a low HELOC appraisal?
A: You can request a second opinion or appeal if you believe the appraisal undervalued your property, but approval is not guaranteed.
