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Qualifying for a Home Equity Loan:Home Value |
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Lenders will not extend a loan amount that exceeds the value of your home
Most lenders qualify loan amounts using a Long-to-Value (LTV) calculation
That is why the value of your home is an important component lenders use to qualify you for a loan amount
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Qualifying for a Home Equity Loan:Your Credit Rating |
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Your credit report is used by banks and other lending institutions to determine your credit worthiness.
The report can be a factor in a lending institution's decision to approve or decline your home equity application.
You need a credit history of at least one year to ensure a good credit report.
Establishing a good credit report can payoff in lower rates and better loan management.
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Qualifying for a Home Equity Loan:Your Capacity to Repay |
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Your capacity to repay your equity loan is an important factor for lending institutions to qualify an applicant for a loan.
Lenders use two debt ratios
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Qualifying for a Home Equity Loan:Your Employment |
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Your capacity to repay the loan is contingent on your employment and other income sources.
Self-employed individuals will require additional documents to ensure lenders that the applicant has steady income
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