If you have ever thought of putting a new roof on your home, financing your child’s education, or paying medical debts, you could consider applying for a home equity loan to help provide the funding you might need.

What is a Home Equity Loan?

A home equity loan allows you to tap into the available equity in your home to get the cash you need. It often runs at a lower interest rate than a personal bank loan or a credit card. In most cases, you can borrow up to 80% of the available equity in your home. For example, if the value of your home is $300,000 and you owe $200,000, you would be able to get $80,000 in equity from the remaining $100,000. A lender will determine the current value of your home through an appraisal, which will cost you anywhere between $300 and $500.

The home equity loan requirements are similar to mortgage requirements. Lenders will take a careful look at debt-to-income (DTI) ratios as well as credit scores. In many cases, your DTI ratio will carry the higher weight with the federal regulatory limit set at 43%.

What Documents Will I Need to Apply for a Home Equity Loan?

  • W2s for the past two years, including tax returns and 1099 if self-employed
  • Documentation supporting any assets, which may include bank accounts, brokerage accounts, annuities and IRAs
  • Records showing current debts, such as credit cards as well as other outstanding mortgages and loans
  • Your latest pay stub which indicates your year-to-date income

Once you close on your 2nd Mortgage, you will receive one lump-sum payment to use as you wish. You will need to make your fixed monthly payments, including interest, as they become due. The most significant risk you will face is that your house will serve as collateral; therefore, if you are unable to make your loan payments, your lender can foreclose, and you can lose your home.

What if I Can’t Satisfy the Home Equity Loan?

If you can’t satisfy the home equity loan requirements, the likelihood that you will not be able to get your loan becomes substantially higher. Your lender may tell you to wait and may offer advice on how to raise your credit score or lower your DTI. Some lenders may refer you to a financial planner or another qualified individual who may help you get started. He or she may suggest consolidating your debt into fewer payments or sharing ideas on how to structure your budget so you can have more money to pay down your debt.

  • You may also try another lender. Although most guidelines remain the same among lenders, some may be less stringent and may be able to offer you a loan despite the higher risk, even though it may mean doing so at a higher interest rate.
  • If your need for cash does not exceed your credit card limits, you could choose to use one or more of your cards as a 2nd Mortgage alternative. Keep in mind that you may dramatically increase your debt to income ratio as well as max out your credit card limit, both of which could have a profound, negative effect on your credit score. Also, you may have limited, if any, funds available for emergencies.
  • You may choose to take out a personal loan. However, this type of loan may have restrictions, such as a higher interest rate or unmanageable monthly payments.

What if I Need the Money Now?

Let’s face it – you may not be able to wait until you can satisfy all the home equity loan requirements, especially if you are overwhelmed with debt, faced with possible foreclosure or threats on attachment of assets. You need your money now and may be looking for an alternative to home refinancing in Chicago.

Bad credit or high DTI should not be deterrents as far as getting the cash you need is concerned. You may think that you have exhausted all your options, however, there is another choice that involves no credit checks or credit score requirements, and it may just fit your needs.

SKYDAN Equity Can Help

If you are struggling financially, we can help by offering a substitute for traditional lending. We are not a lender; instead, we are a real estate investment company that will work hard to help you get the cash you need when you are unable to qualify for a loan or when the other alternatives seem insurmountable.

If you have equity in your home, we offer a hassle-free home equity loan alternative solution that can put money in your pocket in about 30 days or fewer.

It is called the SKYDAN Equity Partners’ Sale-Leaseback Program, and this is how it can benefit you:

  • No need to adhere to the traditional lender requirements, such as DTI, income, current debt or credit score
  • Based on the value of your home
  • No interest or monthly payments paid to a lender, leaving more cash to pay down other debts

How does SKYDAN Equity Partners’ Sale-Leaseback Program Work?

It may sound too good to be true, but it is a viable alternative to home refinancing in Chicago. We purchase your home and lease it back to you for no more than two years. You may decide to pay the rent, or opt to defer it, until the end of the agreement period. At the end of that time, you may choose to re-purchase your home at the original price plus any unpaid rent, and you may decide to sell your home and pocket any funds that are in excess of the original agreement.

How Do I Get Started?

Within five days after speaking with you, we will visit your home to begin the process of qualification. By the end of ten days, we will decide how much money you can receive based on the value of your home. Then, you can choose whether you will accept or decline. On or before the thirtieth day, you will receive the agreed-upon amount. It is that simple. Call us now to schedule a visit!