Preparing Your Home Equity Application

When preparing your home equity application, there are certain documents and pieces of information that will be useful to keep handy. Lenders need documented proof of income, real estate ownership, the current market value of your property, and your creditworthiness.

You should be prepared with your two most recent pay-stubs from your employer. If you are self-employed, the lender will want to see two years of tax returns. Recent bank statements are also helpful in proving income.

The real estate related documents that you will need include a copy of the property deed, proof of homeowner's insurance, and your current mortgage statement showing the outstanding balance.

In order to prove the current market value of your property, you will have to have a new appraisal done by a professional. The appraiser will provide you with a document that quotes the value of your property under the current market conditions. You should expect to pay the appraiser a few hundred dollars.

The creditor will need to check your credit report. You do not need to bring this with you when you apply, but you will need to authorize a credit check by signing a paper they will provide, and typically paying a fee.