A great way to fund a purchase, pay off unexpected expenses, or remodel your home is by taking out a home equity loan. One benefit of owning your home is being able to borrow against the equity you have built in it. Home equity loans allow you to take advantage of this equity, but there's more to getting approved for this type of loan than just having equity. Here's what you will need if you want to get approved for a home equity loan.
Enough Equity In Your Home
While you may have some equity in place from owning your home, most lenders require that you have at least a specific amount of equity built up before approving your loan application. How much equity you need in your home to qualify for a home equity loan varies depending on the lender. Most lenders require you have at least 20 percent equity in your home or more before offering you a home equity loan.
A Good Credit Score
When it comes to home equity loans, you'll want to consider whether your credit score will prevent you from qualifying for this type of loan. Most lenders require a good credit score, usually at least 680, before approving you for a home equity loan. However, some home equity loan services may work with you if you have bad credit. You can also use a co-signer for a home equity loan. Checking your credit score and looking for inaccuracies that may impact your score can also make a difference when applying for a home equity loan.
When you apply for a home equity loan, a lender will look at your income to determine if it is sufficient. While most lenders do not specify their income requirements, you'll need to have a steady income and enough money coming in to afford your home equity loan. The higher your income, the more likely you will be to get approved for a home equity loan. When you start the loan application process, you will need to present proof of income, so have documents like W-2s and paystubs ready to go.
If you are looking into a home equity loan, here's what you'll need to get approved for one. First, you will usually need around 20 percent equity in your home to be approved for a home equity loan. Second, a good credit score is also typically a requirement for this type of loan. Finally, you will need a steady income before applying for a home equity loan.
For more info, contact a local institution like LincOne Federal Credit Union.Share