You may be able to obtain a new loan if you paid off your original mortgage or inherited a property that is free and clear. You might obtain a home loan if your credit standing and monthly income meets the underwriting qualifications for the mortgage amount that you are seeking.
Locate a Lender
Find a mortgage lender to obtain a loan on your home. Inquire about mortgage loans with the institution that maintains your checking or savings account. Your local directory should provide a listing of mortgage lenders who provide home loans in your area. Most mortgage lenders are accessible online and provide options that allow you to chat with a representative online, contact representatives by phone or peruse their website for information about home loans.
Review Loan Options
Several loan options may exist to meet your needs; however, you must satisfy certain requirements prior to obtaining a loan approval. You might consider a fixed-rate mortgage loan or a home equity line of credit to satisfy your funding needs. Both programs will allow you to utilize some of the equity within your home. Typically a fixed-rate loan such as 15-year mortgage may provide a low interest rate and sufficient time to repay your loan. However, you are required to make regular monthly payments until the loan is paid off. A HELOC will only require you to make monthly payments based on your outstanding mortgage balance.
Apply for Loan
Give a lender permission to order your credit report. Complete a loan application and supply documents that reflect your earned wages and any additional sources of income. Your home lender will check the information that you provided and send federal and state disclosures for you to sign. Your mortgage lender will order an appraisal to verify your estimated value of your home. At the conclusion of your loan processing you should be eligible to get a home loan.
Attend Loan Settlement
A title attorney will inform you of the new lien being secured against your home as collateral for your mortgage lender. Check the lender-provided documents to ensure that the terms are agreeable. The settlement attorney should be able to answer any questions that you have about the loan or the title to your home. Typically, a mortgage closing session will last for less than one hour.
- Consumer Financial Protection Bureau. "What Is a Second Mortgage Loan or 'Junior-Lien'?" Accessed Feb. 12, 2020.
- Consumer Financial Protection Bureau. "What Is a Home Equity Loan?" Accessed Feb. 12, 2020.
- U.S. Bank. "Second Mortgage vs. Home Equity Loan." Accessed Feb. 12, 2020.
- Consumer Financial Protection Bureau. "My Lender Offered Me a Home Equity Line of Credit (HELOC). What Is a HELOC?" Accessed Feb. 12, 2020.
- FDIC. "Down Payment and Closing Cost Assistance," Page 1. Accessed Feb. 12, 2020.
- Consumer Financial Protection Bureau. "What Is a 'Piggyback' Second Mortgage?" Accessed Feb. 12, 2020.
- Experian. "What Is Debt Consolidation?" Accessed Feb. 12, 2020.
- Indiana University School of Public and Environmental Affairs. "Bailing out Underwater Mortgages." Accessed Feb. 12, 2020.
- Federal Trade Commission. "Coping With Debt." Accessed Feb. 12, 2020.
- Discover Bank. "Home Equity Loan vs. Cash-Out Refinance." Accessed Feb. 12, 2020.
- Discover Bank. "Common FAQs and Requirements for a Second Mortgage." Accessed Feb. 12, 2020.
Ray Cole has written professionally since 1999 and has designed dozens of Web sites. Cole writes for eHow and "SF Gate." As a small business owner for over 15 years, he provides mortgage services, credit-related help and financial planning for his clients. Cole is currently writing a book about personal finance. He has also studied and taught martial arts for over 31 years.