Because home equity borrowing is secured by your home and considered a second mortgage, lenders have to take special care when they loan money using your home as collateral. A great deal of care, in fact, since second mortgages are subordinated to the first or primary mortgage on your home. That means the risk of the second mortgage is greater. They will not be reimbursed their principal until the balance owing on the first mortgage is paid off.

As a result, applying for a home equity loan or home equity credit line is very similar to applying for a mortgage. First, decide whether you want a home equity loan, home equity credit line, or home improvement loan. Our section on Home Equity Borrowing Tips And Terms shows you some of the things you should consider. Then check our BankSITE Directory for A Bank Near You.

Based on the requirements of the bank, just collect the information you need and fill out the bank's application. Some banks will make their application available to you online. (If not, you can use our standard Home Equity Borrowing Application now for your convenience. However, additional information may be required by the Bank later.

What Happens Next?

When the bank receives your application they will collect additional information including...

• An Appraisal (you'll need to supply the lender with a legal description of the property. They may require other information, as well.)
• Title Search
• Inspections
• Verification of Employment
• Verification of Assets and Investments
• Credit Check
• Additional documents from you based on your particular circumstances.

Once this information is gathered, the bank will make a final determination on your home equity loan request. you'll be contacted if additional information is required based on your particular situation. And once you're approved, you'll be able to move on quickly to closing.

A Tip About Time

Once you've begun the application process, relax! Banks are owned by shareholders (members of the public, just like you and me) and they are required to assemble documentation to protect their investment, called "due diligence."

But the good news about Home Equity Loans and Credit Lines is that things move much more rapidly than they do with most first mortgages. Most banks can tell you fairly quickly whether you'll get the loan. And if you've got a minute, you can Take The Home Equity Borrowing Test right now! It's a good indication of how banks will view your situation.