Who Could Acquire a Home Equity Loan?

April 2, 2019

If you and your significant other own a house, and the two of you want to get a home equity loan together, you may want to know who could actually acquire the loan. Well, to acquire an equity loan, your name must be on the deed.

If only one of you has their name on the house deed, then that is the person who can acquire the home equity loan. If that is the case, then you will still need your spouse’s approval to obtain the loan if the deed is in his/her name. If both of you have your name of the mortgage, then either of you could take out the loan, or you could choose to obtain it together.

Find out more in this MaxCash article about who could acquire a home equity loan.

Why Get a Home Equity Loan Without Your Spouse’s Signature?

The ideal scenario in which you do not have to use your spouse’s signature, is if you had good credit and your spouse did not. If your credit is significantly better than your spouse’s, then you could go through the approval process without them. This will ensure that a lender will only consider your income and credit when trying to qualify.

In order to start the process without your significant other, you must have them sign a spousal consent form allowing you to take on the responsibility yourself.

Using Another Property to Get an Equity Loan

When you are married, the house that you and your spouse live in is considered your marital residence. Which means if you are looking to get an equity loan, you will need their consent and/or signature first.

But if you own another property that is not in your spouse’s name, then you could obtain an equity loan without their consent. Properties that you could use as collateral for the equity loan are:

  • A vacation home
  • A hunting cabin
  • Office space

Just know that if you want to use your primary residence to get an equity loan, because it might have more equity, then you will have to involve your spouse in the process.

The Consequences of Not Involving Your Spouse to Get a Home Equity Loan

Getting a home equity loan on a jointly owned residence is quite hard to do without spousal consent. Though if you do somehow get through the whole process without their knowledge, then they do have the right to seek legal action against the lender.

If you are in the middle of a divorce, then a judge could find you liable for the debt. Meaning that the amount of assets you receive in the settlement could be affected.

Always be sure to include your spouse in any financial matters, or at least inform them beforehand.

Additional Things to Know About Home Equity Loans

Now that you know who could take out an equity loan, there are a few other details you should probably be aware of as well.

The Amount of Time it Takes to Receive Funds

The time of time it takes to receive funds with an equity loan will differ from lender to lender. But on average, it could take anywhere from 2 to 6 weeks before you receive your money.

Some lender may be faster, and some may be slower. The time is also contingent on how quickly you could turn in the necessary information.

There are Two Types of Equity Loans

Some don’t know this but there are actually two types of equity loans:

  • A fixed rate loan
  • A line of credit loan

A fixed rate equity loan is the most common type of loan that people get. Having a fixed rate allows borrowers to receive funds in one lump sum and receive monthly payments and interest rates that are locked at a set amount. This means that the monthly payment amount will not change throughout the life of the loan.

Then there is the home equity line of credit, or HELOC for short. With a HELOC, a borrower will be allowed to draw on a line of credit several times throughout the life of the loan. So, a person can take out the money they need, pay back what they borrowed, and take out more.

HELCOs have variable interest rates, so they could change throughout the life of the loan. If you don’t want to pay more one month, and less the next, stick with a fixed rate loan.

The Amount of Time it Takes to Repay the Debt

Repaying an equity loan depends on which type of debt you take out. The smallest loan term you can get is 5 years, and the amount of money you could borrow with a home equity loan can reach $30,000 or more.

Many borrowers have trouble paying back their loan in so short a time frame.  If you don’t think you can repay your debt within 5 years, a fixed rate loan is the better option. The reason being is that fixed rate loans could have terms as long as 15 years. Which could make home equity loan repayment much easier.

When considering obtaining an equity loan, you should consider allowing MaxCash to help you out. By using MaxCash’s services, we can do all the heavy lifting for you, so to speak. We will search your area for the best, trustworthy lender, find you the best loan deal we can, and help answer any questions you may have along the way.

Not to mention, we’ll do all this free of charge. That’s right, we don’t charge a thing. So, if you wish to try out MaxCash’s services for yourself, give us a call at (833) 207-9052 or send an email to info@maxcash.com.

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