Question:

How to get a home equity loan?

Answer:

Borrowers should know how to get a home equity loan in a smart way. Before you go shopping for a loan, you could try to identify what home equity loans are, how they work and what you are going to use the money for.

Before you apply for any home equity loan, pull out your report from the three major credit bureaus. According to the law, you are entitled to one credit report from each per year. However, if you want your score, you'll have to pay for it.

Do I show income with home equity loans?

Be prepared to provide proof of income if you want to have decent rates. W-2s, bank statements and tax returns may be required. Or, if you decide to go stated income, get ready for a higher rate.

How much can I borrow with a home equity loan?

One thing you should be aware about before you apply for a home equity loan. You have to know how much equity there is in your house. For example, if you're your house is worth $250,000 and your first mortgage balance is $200,000 your equity is $50,000. If your home equity loan allows 100% LTV, you could borrow $50,000. If the lender allows only 80% LTV, you can't borrow money. If the lender offers over equity 125% LTV, you could borrow up to $112,500.

Bad news is a home equity loan almost always will have fees and closing costs much as a regular first mortgage. In comparison, home equity lines of credit have small or none closing costs.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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