Home Equity Loans
Home equity loan is a rational way out of a situation when money is urgently needed. Such a loan is no different from a consumer loan, only a house, plot or apartment is a guarantee of a refund. In this case, guarantors are not needed. The amount can be taken both in cash and on the credit card.
Requirements for borrowers and collateral
To issue a loan secured by real estate, the client must meet certain requirements. They may vary from bank to MFIs, but the most common are:
- US citizenship;
- age – from 18 to 65 years old (some financial organizations set a lower threshold from 21-22 years old, while others are ready to cooperate with borrowers up to 70-75 years old);
- official work experience from 1 year (sometimes from 24 months).
Depending on the specific program, the collateral object can be an apartment, as well as a house, townhouse, garage. The wear rate of the object should not exceed 55-60%. It requires the main communications – electricity, water supply, waste-water disposal system, heating system. The property must be free of encumbrances and minor owners.
Online registration terms
Leave an application on the official website of the organization to take a loan secured by real estate online. Indicate the purpose of getting the money, as well as information about the object. Collect the package of documents and contact the bank department. Agree on the amount and terms of the loan, then sign the agreement. After that, you will be able to get the required amount – in cash or by depositing your account.
Issuing and servicing a loan
Interest rates on home equity loans are significantly lower than for ordinary consumer loans and start at 6.9%. This is associated with lower risks – if the borrower ceases to fulfill its obligations under the agreement, the bank will put up the collateral object for sale and cover the losses due to this. In the absence of insurance, the indicator usually increases by 1-5 percentage points. The loan term in different organizations ranges from 5 to 30 years. In this case, the borrower has the right to repay the debt ahead of schedule without any commissions and fines.
- Housing remains in the borrower’s ownership. No need to draw up documents for a legal entity and register at a different address.
- You can get a large amount for any purpose – depending on the program terms.
- It takes up to a week to make a decision, although some organizations give an answer on the same day.
- A number of organizations are ready to issue a home equity loan without a certificate of income.