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If you need to remodel or repair your home, for debt
consolidation or for educational expenses a home equity
loan may be the best option available to you. Not only
are you able to "tap" the equity in your home,
the interest charges are, in most cases, tax deductable
(there are limits to your deductability if the total
amount of loans is in excess of 100% of its value).
There are a couple of options available to you. You
can choose either home equity loan refinancing,
which is a fixed amount of money that is repaid over
a fixed number of years, or a Home Equity Line
of Credit, where you will be approved for a
set amount of money which you will access as you need
it--whether for home improvements or some other use.
Accessing your line of credit is as easy as writing
a check.
The equity in your home is your best collateral for
a loan, because lenders consider home loans to be almost
risk-free (even if you have credit problems). As a result,
home equity loan refinancing command the most
favorable terms, and you can:
- Get an interest rate so low, it puts your credit
cards to shame.
- Borrow up to 125% of the value of your home.
- Legally pay no taxes on the interest portion of
your loan (a huge advantage of home loans; check with
your tax advisor).
- Free yourself of credit card debt and crippling
interest rates.
- Reclaim thousands of dollars (in interest savings)
over the life of your loan.
- Trade your daunting pile of bills for ONE affordable
monthly payment.
Fast. Apply online, without ever
leaving your chair. The online form takes just minutes
to complete. Within a few days, and usually within 24
hours, our network will email you real home equity loan
offers, not leads or come-ons!
Risk-Free. Our mission is to help
you get the best terms possible on a home equity
loan refinancing - no matter where you get it. That's
why the loan offer you receive will include exact interest
rates, monthly payments, and other loan terms. We want
you to compare.
Chances are, you'll be pleased with the offer we obtain.
But you're under no obligation. No one will call you.
And our service is free.
Home Equity Loan Guidelines
When you apply for a new home equity loan, lenders are
checking for certain criteria. Here is an overview of
what they are looking for:
Your credit report is one of the main considerations
when applying for a home equity loan. It shows the lender
what kind of borrower you are, how much you owe, do
you pay on time, and if you have had any bankruptcies,
judgments, repossessions and delinquent accounts.
Home equity loan refinancing guidelines allow
for compensating factors to offset derogatory credit,
such as the loan to value, or your job stability. A
good credit history allows the lender to offer a higher
loan to value, a higher loan amount, and a better interest
rate. On the other hand, a low credit score means the
lender may offset the risk by reducing the loan to value,
and raising the rate.
A good written explanation for credit problems can
make a difference in getting a home equity loan. Lenders
know that a temporary situation can cause late loan
payments, such as, an illness that prevented you from
working, or a job lay off that created a gap in your
employment.
Another factor in qualifying for home equity loan refinancing,
is your income. Job stability is determined by how long
you have been with your current employer, and how long
in the same type of work. A borrower that has changed
jobs frequently, especially in different fields of employment,
will be considered a higher risk for a home equity loan.
Lenders like to see a minimum of two years in the same
job, or the same type of work.
The total income used for the debt ratio depends on
the source. Salary or wages are figured on a monthly
basis, while overtime or bonuses will be averaged for
the last year or two. For self-employed borrowers, the
net income is averaged for the last two years. Other
income may, or may not be included, depending the history
of the income and how long it will continue. For example,
a part-time job needs a two year history.
The home equity loan debt ratio has two parts, the
total housing expense divided by the total income, and
the total of all debts divided by the total income.
If credit cards or other loans are going to be paid
off with the new loan, those payments will not be included
in the ratio.
The loan to value also influences the home equity loan
decision. The more equity you have, the lower the perceived
risk to the lender. The percentage of equity relative
to the value of your home is an important factor for
loan approval and the interest rate. Some lenders have
a maximum loan to value of 80%, while others will lend
as high as 125%.
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