Home equity loans are becoming a popular means of borrowing against the value of your home. There are actually two types of equity loans available called the “open end” and the “closed end” loans. An equity loan is one in which you take the equity in your home and use it for collateral so you can receive a loan.
Before you can qualify for a home equity loan you will most likely be required to have very good or excellent credit. If you meet these qualifications, this is how a home equity loan works.
When you apply for the loan there is a process that you must follow. You will start by filling out an application form. The loan representative will ask you to verify the information on your application and they will ask for any additional information that is needed. At this time they will also provide you with vital information such as the terms of the loan and the interest rates.
The details that you provided to the loan representative will be confirmed and then you will need to download an authorization form that will start the loan approval process. You will need to sign the application and fax it back.
The documents that you will need to provide to receive a home equity loan are listed below:
• W-2 Forms
• Proof of Income
• Proof of Homeowners Insurance
• Financial Analysis Worksheet
• Mortgage Statements
• Appraisal Forms for the Equity
• Bank Statements
Have this information ready when you first apply for the loan and it will save you a lot of time. Once all the information has been submitted it will be processed and then you will be asked to schedule a document signing. Make sure you understand everything in the documents before you sign so you don’t end up with any surprises later. The documents will be verified and validated and then sent on to the funding department. At this point the check will be issued and the loan is complete.
A home equity loan is a great way to receive the extra money you need to pay for any unexpected expenses that come along. It can be used for remodeling your home, medical bills, school expenses and so forth.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
