Hot Tips For Getting a Home Equity Loan

You may need little bit of extra cash for several different reasons and tapping into your home equity could be the cheapest form of borrowing. This is especially true if you are not able to pay the loan in a short period of time. If you think that you pay the amount you borrowed pretty fast because you have money coming in even a personal loan could cover the money you need for a short period of time. If the amount a bit larger and the current mortgage rates are lower than your existing home mortgage rate, you may consider refinance home mortgage loan as well. With refinance mortgage you can borrow the funds for a longer period and lower your existing mortgage interest rate and monthly payments. The amount, the duration of the borrowing and the current rates are the main points to take into account to decide which option suites you best. Here are a few tips for you to save time and money on second mortgage.

1. Start with checking the current rates on your options. These could be home equity loan, refinance or even personal loan. Do not guess anything, just get online and do a bit of research. It really does not take that long.

2. It is wise to check your current credit score first. You want to find out your credit worthiness before a lender tells you. If you have a very good credit score, you know that you are in a better position.

3. Start preparing for the documents you will be asked. Your income details, your bank statements, credit card statements are essential documents for the loan underwriting process. Have them in hand ready.

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4. Prepare an acceptable answer as to why you would like to have some extra cash. Word it in a way that makes a mortgage underwriter's job easier.

5. You need to have a clear idea of ​​what you would like to achieve with this loan, how much and for how long you are borrowing and what is really important to you.

6. Give a proper consideration to all of your options. There may be several ways open to you. Second mortgage, refinance, personal loan or getting a new credit card with a 0% interest for the first year, just might do the job. That is why just doing the research rather that proceeding with the assumed path will pay off.

7. Once you check the availability and your qualification for two or three loans, you need to look deep into it. What is a real deal, what is a teaser or promotional rate? You need to consider what is realistic for you. Credit card is a good example. You may be able to get a credit card with 0% interest for a year; however, if you are not able to pay this loan back in a year, the rate normally shoots to 17 – 20%. That will wipe out first years savings pretty fast.

8. Every year many home mortgage loan applications are being returned because they are incomplete. Fill your application properly and thoroughly. Mortgage companies do not prepare these application forms to bore you. They need all the answers to all the questions. Take your time, find the proper answers.

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9. Always be realistic. Know your circumstances well and proceed to fulfil your goals. Never overextend yourself with borrowing. Leave yourself a breading space to fall back onto if things do not go according to plan. If you borrow to the tilt, you will be cornering yourself.

10. Always take advice, especially from your partner. They may be accommodating to your wishes, because they love you. Take his / her concerns into account. Two heads are always better than one.