• How Do I Qualify for a Home Equity Loan?

The lending criteria for Home and Equity Loans can often be complicated and time consuming as getting the your mortgage in the first place.
Customarily, the lender will perform a credit check of the borrower or borrowers, conduct an appraisal of the property, review the chain of ownership or title of the property, and require various forms of insurance for title, hazard, and flood.

  • Home Equity Loan Procedures

Depending on the lender and the amount of the Home Equity Loan, the loan process usually begins with the borrower completing an application. Borrowers should keep in mind that they are generally not limited to applying for a Home Equity Loan with their current mortgage company but are usually free to shop around and contact whichever lender they wish.

Approvals of Home Loans
The Home Loan Approval Process varies from lender to lender but will usually follow a multi-step procedure. The Loan Approval Process starts after the borrower has selected a suitable lender. Usually the Borrower will choose a lender after the Borrower has done some comparative pricing. Usually the Lender with the most competitive interest rates as well as the lowest loan processing fees and other costs will be chosen.

Evidence of other Assets such as savings accounts, investment or retirement accounts (showing CD, stock, Mutual Funds or other investments, or any other statements from financial institutions where you maintain liquid assets. The loan processor will review the loan application and accompanying documentation to make sure that the loan paperwork proper order. Usually the Borrower’s meeting with the Loan Officer lasts 2 hours. A second meeting is generally not required. However, Borrowers may be asked to provide supplemental paperwork or additional documents if the Loan Officer needs further evidence in support of the Loan Application.

Loan Underwriting
The next step in the Home Loan or Equity Loan Approval Process is called underwriting. Underwriting is by far the most complex and time consuming part of the Loan Application process. Underwriting requires many steps because the purpose of Underwriting is for the lender to review the validity and accuracy of the Loan Application and borrower’s ability to repay the loan.

Underwriting criteria for self-employed borrowers is different from the criteria used to assess the creditworthiness of a Borrower who is employed. In the case of self-employed persons, the lender may require detailed financial documentation prepared by a Certified Public Accountant. In addition to tax returns, examples of detailed financial documentation may include income statements, balance sheets and other evidence of financial standing.

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