When you’re in the market for a home equity loan, your bank will want to know about your current mortgage and your creditworthiness. That is, have you made your mortgage payments on time, have you built equity in your home, and can the bank take a risk on you and lend you money. Therefore your bank will look at your current mortgage history. They will want to know your income; if you are employed and for how long. They will also want to know what other assets you may have to show your creditworthiness.
When you first apply for a home equity loan, you will need to provide the same documents you supplied when you first applied for your original home mortgage. First your bank will ask you for permission to pull your credit report. They will then use your credit history, along with the documents you supply, to determine if they can approve your home equity loan.
Here is an easy checklist of the documents you may need to be approved for a home equity loan.
Income and Employment
- Most recent pay stub for each applicant
- Most recent W-2 for each applicant
Note if you are self-employed you will most likely need these documents
- Most recent two years signed Federal tax returns
- Current mortgage statement
- Proof of homeowner’s insurance on all properties owned individually
- Two most recent paid tax receipts on all properties owned individually
Other Income and Assets
- Copy of deposit account statements if not with Chelsea State Bank
- Copy of investment statements
- Income from other sources – e.g., social security, pension income and investment income. This includes the annual award letter from Social Security, 1099-R, asset statements, and last month’s bank statement showing direct deposit of funds.
- Copy of photo identification – e.g., driver’s license, state-issued ID, passport, etc.
This is a typical checklist of the documents you may need to be approved for a home equity loan. Your bank might require more documentation or less information, but this gives you an idea of the type of information to start gathering to support your mortgage history and creditworthiness. It’s your opportunity to show your bank they can take a risk on you and lend you money.
For more information on a personal loan, call Chelsea State Bank at 734.475.4210 or visit us at https://www.chelseastate.bank/loans-mortgages/home-loans/home-equity-loans to explore your options. We are here to help with all your lending needs.
Loans are subject to credit review and approval.