Can I Get a Home Equity Loan Online?

typing laptop with potplant

You can get almost anything online these days, from a cheeseburger to a cheetah (statue). But those are both objects, which are significantly easier to ship out than something intangible like a mortgage. Is it possible, in this modern age, to get a home equity loan online?

The answer, it would seem, is yes -- with some caveats.

Documentation for Your Online Home Equity Loan

Getting a home equity loan online may feel like a fantasy, but it’s reality for many homeowners in this modern age. Instead of trudging back and forth to the bank to deliver one more piece of paper, you need only upload your documents to the appropriate server and you’re done. Go find this stuff right now and you’ll be set:

Current mortgage information. Your most recent statement should show how much you still owe on your loan, what your monthly payment is (with and without taxes and insurance), and the full legal address of your property. If you can’t find your last statement, check your online mortgage account for this information.

Estimated home value. You can get an idea of what your home is worth by comparing it to homes around you. If nothing has sold lately, you may want to fall back on the value your home was appraised for when you purchased it. Either way, an appraiser will end up coming out to your home to verify the value before the loan is closed, so try to get as close as you can.

Social security number for each borrower. Every banking transaction requires a paper trail and verification of the identity of the person or people involved. In addition, the bank making your home equity loan will want to run a credit check to verify your debts and credit score.

Annual household income. The real question here from the bank’s perspective is “do you make enough money to afford this additional payment?” Using your household income information and the debt information from your credit report, the banker behind the scenes will calculate your debt to income ratio and use that to determine how much, if anything, the bank will loan.

Employer information. Just like when you got the first mortgage, you have to prove you’re a worker and willing to continue to be one into the future. If you have other sorts of income, that works, too, as long as it’s as close to guaranteed as possible. You’ll need some paperwork to back up non-employment income, and employer information can be verified with a quick call.

Your online banker will help you find the paperwork you need to complete the task, often without having to leave your couch until closing. The information age is really kinda cool, isn’t it?

How Long Does it Take?

An approval for an online home equity loan can be pretty fast, especially if you have all your paperwork in order, your credit is clean, and you have a solid work history. An appraisal is necessary, but in many cases, banks will send an appraiser to do a drive-by appraisal instead of a full appraisal. That can speed the process up dramatically.

Depending on how long it takes the bank and the title company to draw up your paperwork, it can take a couple of weeks to a month to close on a home equity loan. Since you’re not selling the property and there’s no need for a home inspection, the only hurdles to clear are documentation, appraisal, and a title search. And, don’t forget, you still have the right to change your mind and cancel the loan within three days of signing at closing, just in case you decide you’ve made a hasty decision with such a short timeline.

If you would like to learn more about applying for home equity loans online, fill out the form below and a home equity specialist will reach out to you.