Home Equity Line of Credit in Alabama
When you made your down payment on your home in Alabama, you immediately established equity in it. As you made regular monthly mortgage payments, a portion of your debt was paid down, and equity accumulated even further. Property value appreciation also bolstered your home equity. If you have owned your home for several years or more, there is a good chance that the culmination of these three factors has created significant home equity, and you may be wondering how you can tap into that equity. By using a home equity line of credit, you can easily access the money that you have accumulated in your home.
What You Need to Know About Home Equity Lines of credit
A home equity line of credit usually takes the second position. This means that your first lien will not be altered in any way. It also means that if you currently have a second lien on your home, you may need to pay it off or it will need to be paid off at closing. You can typically borrow up to 70 to 75 percent of the total value of your home, and this includes your first lien debt. Therefore, you will need to know your current property value, and you will need to calculate 70 to 75 percent of this value. Then, you will need to subtract your current first lien balance. This is the total amount that you may have access to through a home equity line of credit. In most cases, this will be sufficient for your needs.
How Can You Qualify for a Home Equity Line of Credit?
A home equity line of credit in Alabama can be used to consolidate debt. This may make it easier for you to pay your debts, and it may free up money in your budget. Many people also use lines of credit to pay for home repairs and renovations. However, you will be able to use the funds in any way you desire. You simply have to qualify for your loan first. You may be required to order a new appraisal if a recent one is not available. You also may need to supply documentation similar to what was required when you purchased your home. Your debt ratio, available liquidity, income and credit rating may be reviewed.
Before You Apply
Before you apply for your loan, you may consider requesting a few quotes from some of the top lenders in the state. Getting firm quotes is a great way to determine which lender has the most affordable loan terms. It also will help you to determine which option is most advantageous for your budget. Remember that the payment will become a fixed part of your budget for several years or longer, so you should ensure that it is affordable. Just a few of the top lenders that provide home equity lines of credit in Alabama are Bank of America, Branch Banking and Trust Company, SunTrust Bank, Armed Forces Bank and several others.
If you have equity in your home and you need access to a significant amount of extra money, applying for a home equity line of credit in Alabama may be a great idea. As a first step, review your property value and current debt to ensure that you have enough equity built up in your home to qualify. Then, you can shop around for lenders to ensure that this will be affordable for you and to decide which lender to work with. After you have completed these initial steps, you can easily begin the loan application process to move forward with your line of credit request.