If quarantine and working from home has taught homeowners one thing, it’s this:
There’s always room for improvement.
Lockdown restrictions forced many people to spend extra time at home—which meant they had more time to see exactly what needed improvement! From updated kitchens and room additions, to expanded yards and new roofing, homeowners want better living.
So, how will you help your members with this problem?
Here’s one way to make their application process easier: give them a home equity loan checklist so that they’re prepared during their discussions with your lending team.
Checklist for All Home Equity Loans
The team at RenoFi recently put together a checklist for members applying for home equity loans. Their checklist covers both regular home equity loans and renovation home equity loans (RHELs).
Here’s what they include in their basic home equity loan checklist for borrowers:
- Two most recent pay stubs
- Two years of W-2 forms (you may need to request additional information from self-employed borrowers)
- Proof of homeowners insurance
- Most recent mortgage statement
- Account statements for all personal bank accounts, retirement accounts, and investment accounts for the prior two months
Remind your members that if they have all the above items, they’ll speed through the application much more quickly—and get one step closer to approval. Your credit union may ask for additional information as needed, but these basics should be enough to get the process started without a hitch.
Checklist for Renovation Home Equity Loans
Renovation home equity loans (RHELs) require a little bit more information. Unlike traditional home equity loans, RHELs are based on post-renovation home value. This significantly increases the amount that you can lend. Furthermore, RHELs don’t require a mortgage refinance, so borrowers who are happy with their rates don’t need to change them.
Here’s the additional information borrowers need to apply for an RHEL:
- Contractor contact information, including name, address, phone number, email, company website, etc.
- Preliminary or signed renovation contract with a detailed cost estimate, which should include a detailed material and labor line item cost breakdown and clear payment schedule
- The renovation plans that the contractor will use, such as architectural plans, addition plans, floor plans, and any other designs, drawings, and media
If your members prepare the above information, you’ll be able to more quickly assess their situation. Helping your members prepare application materials with a checklist will improve the whole experience.
You can see more of RenoFi’s home equity loan checklist here. We didn’t get into quite as much detail as they did.
Your credit union may also want to consider creating a digital (or paper) checklist for members to use. Making it clear what you (and they) need to qualify for a home equity loan will save time for your loan officers and ensure that borrowers are well aware of what’s required of them through the application process.
And hey, if this helps your members forget their quarantine blues, then it’s definitely worth it.