EchoBay Expert: I'm ready to apply for a home equity loan online but I'm concerned about what questions the lender is going to ask. What should I be prepared for?
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.