Loan Options Guide

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Get the Scoop on Home Equity Loans

Lee Gross
Loan Options Guide

The last several years have proven to be unprecedented times for property appreciation with homeowners’ s equity increasing at an extraordinary pace. Do borrowers have to sell to access some of that equity? What if a borrower wants to make home improvements, pay for college, buy a car, or consolidate other outstanding bills? Now could be a good time for you to consider a home equity loan or cash-out refinance.

 

What is a home equity loan?

It’s a type of loan that allows you to use the equity you’ve built in your home as collateral to borrow money. Home equity loans are based on the difference between your home’s current market value and your existing mortgage balance.

 

What is a Cash-Out refinance loan?

It’s a type of loan that allows you to borrow in excess of your current mortgage balance. You will pay off the existing mortgage and receive the balance back in your pocket in cash.

 

Is it difficult to get these types of loans?

The minimum requirements to qualify for this loan are:

  • Most credit scores with a minimum of 620
  • Maximum 80% LTV or 20% equity in your home
  • Documented ability to repay your loan

     

    If you want to gain access to some of the equity you’ve built in your home without selling it, then a home equity or cash-out loan could be a good resource.

     

About the Author

Lee Gross

Executive Vice President

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