Posted on: 27th Oct, 2008 08:56 am
how does home equity loan qualification works? my house is worth around $300,000 – $340,000 and my mortgage balance on it is around $140,000 with payments at roughly $2200.
what if i want to qualify for home equity loan or home equity line of credit say for 100.000 grand. how does the whole qualification thing works? what do lenders look at, how they decide?
would appreciate any help. helpful links are good too if you know any resources!
thanks!
what if i want to qualify for home equity loan or home equity line of credit say for 100.000 grand. how does the whole qualification thing works? what do lenders look at, how they decide?
would appreciate any help. helpful links are good too if you know any resources!
thanks!
In todays market, you can only go to a 70%-75% LTV which equals roughly about $70K-$85K max cash to you. You must have at least a 680 credit score. 45% maximum DTI ratio.
Hi Guest!
You will have to go for an appraisal of your house first. If the house appraises in the $300K range, then you will qualify for the $100K home equity. After the appraisal is complete, the bank will also look at your income, employment and other details like it does in case of a regular mortgage.
If the lender/bank approves you for the loan, you will have to go through the closing procedure. This process is similar to the closing in case of a regular mortgage. The difference lies on the part of the lender who has to file a junior lien against the house rather than a primary lien if you default the loan.
Thanks
You will have to go for an appraisal of your house first. If the house appraises in the $300K range, then you will qualify for the $100K home equity. After the appraisal is complete, the bank will also look at your income, employment and other details like it does in case of a regular mortgage.
If the lender/bank approves you for the loan, you will have to go through the closing procedure. This process is similar to the closing in case of a regular mortgage. The difference lies on the part of the lender who has to file a junior lien against the house rather than a primary lien if you default the loan.
Thanks
Inquire at a couple places. Broker channel has been severely reduced or, more often than not, cut off. So its go to the bank. Wherever you go there should be no closing costs. Rates offered are starting to spread. Lots of initial discounted rate; Id avoid unless you have a very unusual situation. Given good credit (720+), Id look for prime minus 1% (i.e, 3.5%) with no annual fee. You may have to back peddle to prime less 0.50% with a $50 fee; still decent at this rate/cost. With banks versus broker comprising the majority of the market, there will be differences between market areas. Do your homework beforehand since theres typically a line cancellation fee within X years if you find a better deal later.
Typically a stated income situation though you might be asked for a W2. 45% debt ratio is likely in force now
Typically a stated income situation though you might be asked for a W2. 45% debt ratio is likely in force now