I Recently Applied For A Home Equity Loan/line Of Credit How Do I Access My Loan Documents Online
If you opted to receive your loan documents electronically at the time of application, you can access them safely and securely from any computer with internet access. The documents will be available within 3 business days of submitting your application. Each applicant must review and sign the documents.
If you’re enrolled in Navy Federals Online Banking, sign in to your Navy Federal online account. In the Loans & Credit section on the Account Summary page, click on Review and Sign Documents for your equity application.
If you’re not enrolled in Navy Federals Online Banking, check your email for instructions from Navy Federal. If you don’t receive an email within 3 business days of submitting your application, check your spam/junk folder or call your Processor. If you have questions, call the Equity Loan Department at and press 2, weekdays from 8 am to 6 pm, Eastern Time. For assistance outside normal business hours, call .
New Electronic Alerts From Your Bank
Some banks have started sending new electronic alerts to help you manage your day-to-day finances and avoid unnecessary fees.
Establish a clear plan for how you’ll use a home equity line of credit. Consider a repayment schedule that includes more than just minimum monthly interest. Make a realistic budget for any projects you may want to do.
You may be able to borrow up to 65% of your homes purchase price or market value on a home equity line of credit. This doesnt mean you have to borrow the entire amount. You may find it easier to manage your debt if you borrow less money.
How To Get The Most Out Of Your Appraisal
If you must get a full appraisal, Christian Mills, a home loan specialist at Reverse Mortgage in Denver, offers these three tips for extracting the most value you can from your home:
- Make sure your property looks its best: For example, you might consider sprucing up the lawn, bushes, trees, and other plants around your home before the appraisal.
- Do your homework: Look online to compare similar homes in your neighborhood so you can get a sense of how much your home is worth.
- Point out home improvements: If youve made significant improvements to your home, make your appraiserand your lenderaware of them so that you have a strong chance your appraisal comes in at value, Mills said.
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Other Options For Debt Consolidation
Although consolidating debt with a home equity loan can be an effective method, its not for everyone. If you fail to repay the loan, the lender can foreclose on your home. There are other ways to consolidate your debt if youre unwilling to risk your home or dont qualify for a home equity loan.
A few options include:
- Debt consolidation loan. A debt consolidation loan is a type of personal loan thats designed specifically for debt consolidation. These products might have more favorable terms compared to a credit card, and theyre unsecured meaning you dont put your home on the line.
- Balance transfer credit card. The best balance transfer credit cards offer a 0 percent introductory APR for a limited time. If youre able to transfer your debt to a balance transfer card and repay it completely within the promotional window, you can save a significant amount in interest.
- Debt management plan. If youre likely to fall into debt again after using one of these debt consolidation strategies, you might need support from a nonprofit credit counseling agency. A certified credit counselor can help you negotiate your interest rates and repayment plan with creditors and create a financial plan tailored to your goals.
Automated Valuation Model Or Desktop Appraisal
The automated valuation model is the fastest and cheapest method for a home appraisal. A lender uses a computer program to crunch the numbers on local property values, home sales data, neighborhood trends, and other residential real estate data to determine your homes estimated market value.
An AVM is where we just punch in the address and the computer, the AI spits it out, explains Gerald Robinson, broker/owner at 1st Choice Mortgage Company. Its super easy to pull an AVM. It takes just 15 to 20 seconds.
This computerized appraisal is fast, easy, and may only cost around $20.
A desktop appraisal is similar to an AVM. Unlike the computer-generated AVM, a desktop appraisal is performed by a human appraiser using property data from third-party sources, such as public records. Desktop appraisals also do not require an in-person home inspection.
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How Do I Determine My Homes Market Value
If you dont have a recent appraisal, you can estimate your homes market value by researching recent sale prices of similar homes in your neighborhood. A local real estate agent can assist you with this process. You can also get a general idea of your homes value by reviewing your tax statements for the assessed value of your home. A current home valuation, including clear pictures of the outside of your home, is required to determine how much equity you can borrow. When you apply for an equity loan/line of credit, your Processor will determine the type of home valuation or appraisal needed based on the details of your loan and can schedule it for you.
How Much Can You Borrow With A Home Equity Loan
A home equity loan generally allows you to borrow around 80% to 85% of your homes value, minus what you owe on your mortgage. You can do some simple math to estimate how much you might be able to borrow.
For example, say your home is worth $350,000, your mortgage balance is $200,000 and your lender will allow you to borrow up to 85% of your homes value. Multiply your home’s value by the percentage you can borrow . That gives you a maximum of $297,500 in value that could be borrowed. Subtract the amount remaining on your mortgage , and you’ll get the approximate sum you can borrow as a home equity loan in this case, $97,500.
Alternately, you can ditch the math and use our home equity loan calculator.
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Current Home Equity Loan Rates
Home equity loan interest rates are typically on par with mortgage loan rates. HELOC interest rates, on the other hand, are variable and can be somewhat higher depending on the bank and the prime rate.
Current home equity loan interest rates range from 4.15% to 13.00% among the banks we reviewed. HELOC interest rates range from 3.57% up to 21%. However, we can expect to see climbing interest rates as the Federal Reserve announces further rate increases.
How To Qualify And Apply For A Home Equity Loan
The first part of qualifying for a home equity loan is checking your credit score. A good score will make it easier to be approved for a loan. If your score is below 620 and you can put off the big expense for now, it can be worthwhile to improve your credit score before you apply.
The next application step is checking if you have enough equity in your home. Equity is the difference between your homes value and how much you still owe on the mortgage.
You build home equity by paying down your mortgage balance over the years. Rising real estate values help equity grow faster.
A loan officer will generally require home equity of at least 15% to 20%. Loan amounts vary by lender, but up to 85% of a homes value can be borrowed against, minus whats owed on the mortgage.
You can do a little math to figure out the maximum amount of equity you can borrow:
Suppose your home is worth $350,000, your mortgage balance is $200,000, and your lender allows you to borrow up to 85% of your homes value. Multiply your homes value by the percentage that can be borrowed . That gives you up to $297,500 that can be borrowed, however, you owe $200,000 on the mortgage. Subtract that $200,000 and youll see that you can borrow up to $97,500 through this second mortgage.
Home Value x Percentage that Can Be Borrowed Mortgage Balance = Maximum Loan Amount
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Can I Convert My Heloc To A Fixed
If your Navy Federal HELOC is older than 6 months, it can be converted to a Fixed-Rate Equity Loan in accordance with the terms of your loan. Please refer to your loan closing package for additional conditions. Conversion will prevent you from making any additional draws. If you have questions about converting a HELOC, call us at
Home Equity Loan Appraisal Process
When looking to obtain a home equity loan or 2nd mortgage, appraisals are generally required to determine value. However, if you have a high level of home equity, you can go with no appraisal as this can be waived in lieu of an inspection or walk-through. This is only in the case of private mortgage lenders and not of conventional lenders like banks.
Generally, the 2nd mortgages loan to value has to be lower than 65% LTV. Moreover, the property should be located in a major metropolitan area like Vancouver BC or any other city in Metro Vancouver, Victoria BC, Kelowna BC and/or close to the investor or their representative.
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What Do Appraisers Look For
The value that the appraiser gives your home largely depends on the recent sales prices of comparable properties. All the same, youre mistaken if you think that you cant do anything to help your home come in at the high end of its potential appraisal value.
Getting your home appraised is similar to going on a first date, says Ailion. While you have no idea how your partner will like or evaluate you, being well-groomed substantially improves your chances of being deemed attractive.
So it is with the appraisal, he says. Your property should be neat and clean, uncluttered, and easy to inspect. Any pets should be contained and smells masked. You dont want the appraiser to be rushed to get out.
Heres how certified residential appraiser Ralph J. Vaccari, president of Vaccari & Associates in Marblehead, Mass., describes his approach to the job: Generally, it should not matter if your lawn is not mowed or your house is a mess. Its important to realize, though, that a dirty or unkempt home can increase its appearance of wear and tear beyond normaland that condition can, in fact, affect value.
According to Vaccari, the appraiser cares about the following:
Its a good idea to point out features that may not be immediately apparent that could potentially add to the appraisers opinion of value, says Parsons.
Why Are Appraisals Needed For Home Equity Loans
Is no appraisal for getting a home equity loan possible? Find out by reading this blog.
Ordering an appraisal is a common step when applying for a mortgage, and even when getting a home equity loan. Appraisals are necessary when homes are being bought or sold, or when people refinance or take out a 2nd mortgage on their home or another piece of real estate.
An appraisal helps the parties involved in the transaction determine the current market value of the home and the propertys condition. In turn, these factors help determine its loan to value and marketability.
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The Bank Told Me That I Could No Longer Get Advances From My Home Equity Line Of Credit Because The Value Of My Home Declined The Notice I Received From The Bank Stated That I Could Appeal The Decision By Obtaining An Updated Appraisal The Bank Indicated That I Would Have To Pay For That Appraisal Can The Bank Require Me To Pay For The Appraisal
Yes. If you appeal the bank’s decision to reduce the credit limit or suspend your ability to draw on your HELOC, then the bank can require you to pay reasonable fees for a home appraisal or credit report fee. Be aware that an updated appraisal does not guarantee that the bank will approve your appeal.
Last Reviewed: April 2021
Please note: The terms “bank” and “banks” used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency . Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.
Home Equity Line Of Credit : What You Need To Know
With home values rising in most areas of the country, many homeowners are interested in a home equity line of credit to access cash especially to fund remodel projects or major home improvements.
In fact, the median existing-home price for all housing types in July 2019 was $280,800, which is up 4.3% from July of 2018 , according to the National Association of Realtors. This gives many homeowners options to use that rising value and their earned equity to their advantage.
A home equity line of credit is a secured loan with your house as collateral with no restrictions on how you can use the money. In addition to home improvements, the funds can be used to pay off medical expenses or help your child with college. But remember, if you take out a home equity line of credit against your house and you can no longer afford the payments, the lender can require you to sell your home to pay back the loan.
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Using A Home Equity Loan On A Paid
A home equity loan is a little different from a HELOC. Instead of getting a credit line that you can use many times, home equity loans give you a one-time, lump-sum payment at closing.
With a home equity loan, repayment looks much like it does on your first mortgage. Youll pay the loan backplus interestmonthly until the entire loan is paid off. Typically, home equity loan terms range from five to 30 years, depending on the lender.
Interest rates on home equity loans are usually fixed, so your rate or payment wont jump over time. Because theyre secured by collateral , they also tend to have lower rates than other types of loans and credit cards.
Heres a lender offering a home equity loan for a paid-off house
- No cash required at closing
- Make fixed monthly payments
If youre eyeing a home equity loan on your paid-off house, Discover is an option. The bank offers credit cards, loans, online banking services, and more.
Here are some important details about the product:
|Discover home equity loan|
Understanding Your Ltv Vs Cltv
Your LTV, or loan-to-value ratio, is a percentage that reflects the difference between your homes value and the amount you still owe on your mortgage.
Lets say your home is worth $350,000 and you still owe $200,000 on your mortgage. Your LTV is calculated by dividing the amount you still owe on your mortgage by the property value .
200,000 / 350,000 = 0.57, or 57 percent LTV
Your CLTV takes into account all loans or lines of credit that use your house as collateral, plus the amount you want to borrow. If you already have a second mortgage or home equity line of credit , that will be taken into account when determining your CLTV for a new HELOC.
Lets say your home is worth $350,000, you still owe $100,000 on your mortgage and you want to borrow $50,000 through a HELOC. In this case, your CLTV would be:
/ 350,000 = 0.43, or 43 percent CLTV.
Lenders typically look for a CLTV of 80 percent or less, though some institutions allow even higher percentages. To estimate how much you might be able to borrow, try a home equity calculator.
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What Can I Do If My Home Appraisal Is Low
If you are not able to successfully challenge a low appraisal, how do you ensure that the refinance goes through? If the appraisal pegs you at less than 80% equity, then you will not meet the necessary 80% loan-to-value ratio and will need to pay PMI unless you choose to do a cash-in refinance, which means adding enough money at the closing to get to that magical 80%.
You can choose to pay the PMI for now. If home values continue to rise, you can later provide comparable sales to your mortgage servicer and ask it to remove PMI, even if you have not yet paid down much of your principal.
Qualifying For The Heloc
The appraisal is just a small part of the qualifying factors necessary for HELOC approval. Youll also have to prove that you can afford the loan. Just like you had to do with your 1st mortgage, youll have to show the lender that you deserve the loan.
Most lenders require:
- Last 2 paystubs covering the last month of employment
- Last 2 years W-2s showing your income over the last 2 years
- Last 2 years tax returns if you are self-employed or work on commission
- Proof of any assets if you need them for qualifying purposes
- Proper credit score based on the lenders requirements
In general, lenders allow as much as an 85% LTV for a HELOC. But, there are some lenders that will go higher. In this case, though, they usually require a full appraisal. If a lender is going to lend you as much as 95% of the value of your home, it just makes sense that theyll need to verify your homes value.
You have the option to shop around for appraisers when you get a HELOC. The key factor, however, is that the appraiser is on the lenders approved list. If he isnt, you may not be able to use him. Some lenders may allow the use of the appraiser, but then theyll require one of their own to review the report. This could cost you more money in the long run.
Whether or not your lender requires an appraisal, consider if its in your best interest. If nothing else, it gives you proof of the current value of your home. This way youll know the true value of one of the largest investments in your life.
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