Dear EchoBay Expert:

Dear Loyal Reader: The good news is that applying for a home equity loan online is a lot easier than applying in person. If there's information you're not comfortable disclosing, it's easier to type the answers into a computer than to speak to someone face to face about it.

The online application process is relatively painless. Online lenders will usually ask you questions about your monthly expenses such as installment loans, revolving credit accounts, and other debts. They will also request information about your employment history and your income and may request information about your savings accounts or investments.

This will help them determine your debt-to-income ratio. They'll want to know the value of your home and how much you owe on your first mortgage. How much money you are approved to borrow will depend on how much equity you have in your home.

The lender will also pull a copy of your credit history to make sure that you don't have any outstanding judgments or accounts in collection. If your application indicates that you meet their requirements, you'll probably need to have an appraisal done in order for the lender to confirm the value of your home.

Dear EchoBay Expert:

Dear Loyal Reader: If interest rates have dropped, it's probably a good idea for you to refinance. If saving thousands of dollars isn't enough of an incentive to convince you to refinance, there are other factors to consider. If your home equity loan is attached to an adjustable interest rate, you may want to refinance in order to protect yourself from a substantially higher loan payment if interest rates were to skyrocket in the future.

If you refinance at a lower rate, but make the same monthly payments that you're making now, you can also significantly reduce the term of your loan, building equity in your home more quickly and getting out of debt faster. Since even an interest rate drop of just one to two percentage points can equate to thousands of dollars in savings, the added benefits of a shorter loan term and quicker equity building are a bonus.

Since home equity loans don't have to be a hassle to refinance and many lenders will work to ensure that everything goes smoothly, the entire process can be well worth the investment of your time.