What is Preventing You from Applying for a Home Equity Loan or Line of Credit?
In our most recent online poll, we asked our customers: what is preventing you from applying for a Home Equity Loan or Line of Credit?
Two Common Responses:
– I think my credit score is low.
– I think my debt is too high.
In both of these scenarios we believe it’s important to talk through the potential roadblocks with your banking professional and to avoid making assumptions.
Bank Lending Standards Can Differ
Lending standards can differ from bank to bank. Some banks have lower thresholds for credit scores in which they will approve a loan application. It’s also important to understand that if your bank is approving a lower credit score, they may offer a higher interest rate on that loan. So you, as a consumer have to decide whether or not that rate is acceptable for you and if it works within your current financial parameters.
When applying for a loan it’s also important to understand that everybody’s situation is different. Two people can have similar credit scores for very different reasons. Often there are mitigating factors out of your control that can affect your credit score. Such as:
– A medical emergency
– Job loss
If you fall into this category it’s often a good idea to work with a bank that doesn’t rely solely on credit scores.
If high debt is preventing you from applying for a Home Equity Loan or Line of Credit, we still encourage you to talk to a bank. They will be able to help determine if the debt that you do have can be consolidated through a Home Equity Loan into a lower monthly payment.
The Bottom Line
The only way to know for sure whether or not you’ll be approved for a Home Equity Loan or Line of Credit is to apply.
If you have more questions, visit our HomeLine page or if you’d like to speak with someone, give us a call at (717) 733.4181, or contact us today!