Home Equity Mortgage Loan
When you use the equity in your home as collateral to take out a mortgage loan, it is termed as a home equity mortgage loan. Home equity is the value of owed money deducted from the present home value. Home equity mortgage loans are taken out for a variety of reasons. These include funding an education, paying medical bills or repairing the home.
Home Equity Mortgage Loan Requirements
To obtain a home equity mortgage loan one usual requirement is a good credit history. A second requirement is a good loan to value as well as combined loan to value ratio.
Difference Between A Home Equity Loan and HELOC
A home equity line of credit involves a line of revolving credit. The rate of interest in this case is adjustable. A home equity mortgage loan on the other hand has a fixed rate of interest and the loan type is one time-lump sum.
Ancillary Fees Involved in Home Equity Mortgage Loans
There are a number of costs associated with such loans. These include stamp duties, title fees, originator fees, appraisal fees, early pay-off, closing fees as well as other costs.
Step 1 – Finding Out The Amount Of Home Equity Mortgage Loan Eligibility
The first step in getting a home equity mortgage loan is finding out how much equity the home has in it. If the present price of the home is $250,000 and the amount owed on it is $100,000 then the home has an equity of $250,000 – $100,000 = $150,000. For this you may need to get your home appraised.
Step 2 – Deciding on a Home Equity Mortgage Loan Lender
There are a number of lenders out there offering home equity mortgage loans. If you have a good credit history, you may have to choose among a plethora of lenders. One way to zero in on a lender is to check their offerings, references from past customers. Check out the best deals online as well.
Step 3 – Applying For The Home Equity Mortgage Loan
This stage may involve applying for the home loan with all the documents that have been requested by the lender. Fill in the documents accurately to get the loan sanctioned fast.
Step 4 – Processing of the Home Equity Mortgage Loan Application
This step involves a verification of documents. In addition a visit from an officer of the lending company as well as an appraiser may be on the cards.
Step 5 – Sanction of Home Equity Mortgage Loan
Once the documents are verified and everything deemed to be in order, the home equity mortgage loan will be sanctioned. Now you have to leave the title deed with the lending company as security.
Step 6 – Home Equity Mortgage Loan Disbursal
In the final stage, the loan will be disbursed to you and you can withdraw it as you need it.
Take a home equity mortgage loan from a reputed company. Also remember that home equity mortgage loans need not be taken on the complete equity of your home. Dig as deep into your pockets as you need to and not deeper.