With spring approaching, home-related spring cleaning and repairs are on the docket for many homeowners. As you gear up for your upcoming home improvements, questions regarding home equity lending may arise. However, before you dive in and get started, consider these four suggestions for determining what your best home equity borrowing options are:
- Ask Questions and Evaluate – Am I a good candidate for a home equity loan or line of credit? Will my history of handling debt play in my favor with my lending institution? Should I be considering a home equity loan, or home equity line of credit? Take a moment to ask yourself these and other important questions and evaluate your current situation to determine whether home equity is an option for you.
- Do the Research – When you're considering a home equity loan or line of credit, be sure to do your research. That includes determining whether or not the amount of equity you have is enough to borrow and making sure you fully understand your loan application process and whether or not an appraisal is a part of that.
- Talk it Through – Communication with your loan institution is key when applying for home equity. Banks are required to obtain specific information from you as part of certain federal reporting requirements – that means you need to provide them with all of the details. Talk everything through with your bank – particularly if you are using your loan or line of credit for debt consolidation purposes.
- Know the Restrictions – Can you pay your loan off early? Are their prepayment requirements? Can I have an equity loan and line of credit at the same time? These, and many others, are important questions to answer when applying for home equity. Know the restrictions of your loan or line of credit well in advance of agreeing to a home equity commitment.
Get moving on the road to making your spring home improvements.