How To Shop For A Home Equity Loan

[Jul 23, 2010.]

 

You may think that with the current state of the economy and mortgage lending being tight, that it is impossible to tap the stored equity in your home. While it is true that there have been a number of changes in lending in recent years, it is far from true that home equity loans don't exist anymore. Actually, home equity loan originations have increased in recent months. There is a very good chance that the right home equity loan is out there, waiting for you. Here are some ideas on how to find the right home equity loan for you.

Try An Alternative Lender - You may think that the only bank that will lend to you is the bank where you have your checking or savings account. That is not necessarily true. If your bank does not offer home equity loans, or has turned you down for a loan, don't give up. Find a mortgage loan officer in your area that may offer a greater variety of mortgage loans. Not all mortgage loans have the same qualifying guidelines. It also pays to shop lenders in order to get the lowest interest rate and closing costs.

Use Online Sources - Shopping online is probably the easiest and often the cheapest way to choose between loans. You can shop dozens of lenders at the touch of a button, from the convenience of your home, and without spending money on gas. You can find banks whose names you may not recognize. The larger banks, like Bank of America and Wells Fargo, have hefty expenses on all their brick and mortar locations. Online lenders tend to run their businesses lean and mean. They can often pass along what they've saved in expenses to their clientele. Check with these online sources for home equity loans now. Always check with either the FDIC or the Federal Reserve to make sure the bank to which you provide your personal information is reputable.

Fix Whatever Is Broken - Home equity loans are approved or disapproved based on the home's equity, your credit score, and your income. If you would like a new home equity loan but do not think you qualify, fix whatever is broken. If your credit score is what is holding you back, a mortgage loan specialist normally gives free credit repair advice that can help you raise your score. Improving your home's equity can be done in several ways: pay off an existing mortgage, improve the home, or gain on your investment. You can improve your debt to income ratio by increasing your income or paying down your debts. Take any steps you can to make your financial picture look attractive to a home loan lender.

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.