| The popularity of stores like Home Depot and Lowe's | | | | property value. Save time by bringing the current tax |
| show how many homeowners are jumping on the | | | | assessment for your property with you. For smaller |
| home improvement bandwagon. Maybe you're thinking | | | | loans (usually $2000 or less), this may be enough |
| of redoing part of your house as well. Perhaps you | | | | information to indicate the home's market value to the |
| want the kitchen of your dreams or an extra | | | | bank's satisfaction. However, for larger loans, banks will |
| bathroom. You know you'll have to take out a loan to | | | | require professional appraisals. Home appraisals |
| finance the project, but if you're just in the beginning | | | | typically cost $200-$300. |
| stages of the planning, you may not know exactly | | | | Above, I mentioned that banks want to know your |
| how to go about it. Whether you're refinancing or | | | | total debt and monthly obligations. Specifically, they |
| taking out a home-equity loan, here's some information | | | | want to know your debt-to-income ratio. If your debt is |
| on what your bank needs: | | | | greater than 30%-40% of your monthly income, the |
| As with any loan, your bank will want to review your | | | | bank may be unwilling to offer a loan out of fear that |
| financial history before approving you for a | | | | you will not be able to make payments. |
| home-equity loan. While different banks will have | | | | To further protect their assets, the bank will require a |
| different loan criteria, there are a few things you can | | | | copy of your credit history to make sure you're not a |
| expect each institution to require: | | | | bad risk. A few months before you decide to take out |
| -Your address and how long you've lived there | | | | a home-equity loan, it's a good idea to get a copy of |
| -Your employment history and current employer | | | | your credit report and check it for errors. Contact the |
| -Your annual income and assets | | | | credit bureau and correct any errors ahead of time. |
| -Your total debt and monthly obligations | | | | This will save time later and help you get the right loan |
| For home-equity loans, the bank will also need | | | | for your home improvement needs. |
| information on your house such as its age and current | | | | |