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Home Equity Loans May Be Harder to Find

Posted by  on Feb 05, 2010
 

Homeowners are finding that home equity loans are not as easy to come by as they once were. Devalued homes and the number of borrowers defaulting on mortgage loans and other forms of credit have caused many lenders to be more cautious.

Lenders are decreasing the number of home equity loans and lines of credit that they approve. In fact, ABC News reports that 25% of households are ineligible for home equity financing because their homes are worth less than the amount of their mortgage loans.

Dire Straits: Banks Cautious with Home Equity Lending

At the height of the home equity loan boom in 2006, lenders made approximately $430 billion in home equity loans and home equity lines of credit (HELOCs). By comparison, only $40 billion in home equity loans were made through September 2009. Without the cushion of consistently rising home values, homeowners are putting off home improvements, vacations, and credit card debt consolidation--which were once funded with home equity loans for many.

Shop and Compare Mortgage Rates, Terms

Shop your bank and credit union for home equity loans, and don't forget to get home equity loan quotes online.

Before searching for home equity loans, it's a good idea to check your credit score. Your credit score and credit report can tell you in advance if you might encounter problems during your application process. Keeping tabs on neighborhood home values, and market trends can also help you understand whether or not mortgage lenders can provide home equity financing.

Shop our database of mortgage lenders for the best mortgage rates and home equity loan options available in your area.

 

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