Home Equity Mortgage Loans
What if you had an investment that had grown in value, but you didn’t know how much it was worth, and you couldn’t withdraw any money from it? You’d probably look for a different investment.
Now think of your home. If you’ve owned it for a while, it’s probably worth more than when you bought it, so that additional value is money you could access. That’s how a home equity mortgage loan works. You find out what your home is worth, and then borrow a portion of the value that exceeds your mortgage balance. The funds can be used for home improvements, debt consolidations, weddings, college tuition, medical bills, and many other expenses.
What is home equity?
Home equity is the difference between the appraised value of your home and the remaining balance of your home loan. As a homeowner, you build home equity by making a down payment and making principal payments against your mortgage.
If the value of your home increases on the fair market, you stand to benefit from the potential increase in home equity when you sell your property. This is another way to increase home equity.
Home equity can be used as collateral for home equity mortgage loans or home equity lines of credit (HELOC). So, if you have home equity, you may be able to use it as a lower interest solution than typical credit cards provide.
What is the process of a home equity mortgage loan?
The process of getting a home equity loan is simple:
- Meet with a CCM loan officer
- Apply for a refinance online or directly with us
- We’ll review your application and order an appraisal
- We’ll ask for any additional items needed for final approval
- Close and access your funds
Eligibility requirements for a home equity loan
Different programs will have different requirements. Here are some things considered when applying for a home equity loan:
- Home equity
- Credit score and credit history
- Debt-to-income (DTI) ratio
- Income
