HOME EQUITY LOAN PROCESS How Home Equity Loans WorkOnce you find a home and decide to take out an equity loan you will need to go through the process of filling out the application. After submitting the application to the lender, you will receive an acceptance or denial letter shortly. If you apply for an equity loan at your local bank the lender will often fill out the application, while asking you questions. If the lender decides you are a good candidate for an equity loan, the lender will ask you to sign a “purchase contract.” The lender will run a credit check to make sure you do not have defaults, judgments, or other negative credits on your credit report. Your source of income will be verified and the lender will search for any “liabilities” to determine if you can repay the loan. Once your application has been accepted you will be asked to sign the “purchase contract,” and then you can begin the process of buying the home. You will need an up-front deposit to close the deal. The contract will cover all the details of the purchase. The deposits, the price of the home, interest, “proposed closing date” and so forth. A meeting date will be set where you will sign papers, negotiate prices, and pay money if applicable. Most lenders require that the homebuyer sign and complete a “Uniform Residential Loan Application” during the interview. The app will cost you upfront fees possibly, and these fees will include valuation costs,arrangement costs, and so forth. Make sure you know what you are getting into before signing any agreement; if you do not read the fine print and actually understand the stipulations of a contract, you may find yourself in more debt at the end of the process.  |