What should I expect when applying for a home equity loan?

Home equity loan process

Applying for a home equity loan can potentially be easier if you apply with the same lender who has your first mortgage loan. This lender should already have some items on file – appraisal, survey, previous loan application – that can speed up the process considerably.

Do keep in mind, however, that even if you use the same lender there are still some things that need to be done to make sure that everything is within legal boundaries.

For example, even if you secured your first mortgage loan weeks ago, you will probably still need to do another title search before your equity loan can be disbursed because the lender must make sure that there are no other people or organizations entitled to the home.

Applying for an equity loan is realatively straightforward; you can usually fill out the application online, over the phone, or at an office location for your lender. The home equity loan funds are disbursed depending upon the terms already agreed upon.

If the loan is for consolidation purposes the lender may issue individual checks to each creditor, but if the money is for another use the borrower may receive a check in his or her name. The lender then assumes the second position on the home’s title because the first position is held by the lender for the first mortgage.