Lenders making home equity loans more accessible

As of July 23, 2012. Source: HSH.com

The Office of the Comptroller of the Currency noted that one in five lenders nationwide loosened up underwriting standards on home equity loans while 68 percent kept them unchanged from a year ago.  During the peak of the housing crisis - no lender had eased standards.  


According to the NYTimes article,  lenders are lowering the credit scores and equity levels needed to qualify from two years ago, especially in areas where home prices are appreciating. 


Today, home equity applications are based on several criteria including:


• The amount of equity available in a home
• a borrower's income
• loan-to-value ratio (as little as 5 percent may be enough to qualify) 


For homeowners who are considering a home equity loan should begin the process by estimating how much equity they might have in their home.  You can email me to receive a free recent comparable sales in your neighborhood based.  You will get a ballpark of what your home is worth.  As part of the application process, lender generally requires an official appraisal. 


TIP: Note loan restrictions.  Some home equity loans do not allow home equity loans to be used for small business investment or buy a second home. 


Source: NYTimes.com