How to Get Approved for a HELOC?


so in this video we’re gonna talk about
what do banks and lenders look at when you’re applying for a hew op and how to
increase your approval rate when applying for a HELOC hey what’s going on guys it’s Sam Kwak
here one of the Kwak Brothers here and today in this video we’re gonna talk
about he locks and continued this series in conversation about home equity line
of credit now you’re probably looking into this video because you’ve checked
out some of our other videos on how to pay off your mortgage faster well in
this instance we’re gonna talk about how to get into a home equity line of credit
now guys I am NOT a banker I am NOT a financial adviser so make sure that you
don’t misconstrue this video as any sort of banking or financial advice make sure
you guys go and actually talk to a banker and a financial advisor to get
further details for your situation now we may actually have a banker in our
podcast and we’re gonna go and do a Q&A with the banker so if you guys want to
see that podcast if you guys want to see us interview a banker about how to
specifically apply for a HELOC and mortgage stick around subscribe to our
youtube channel because we’re gonna release that video very soon you do not
want to miss it so from the general stand point of view
on getting approved for a keylock what do banks and lenders really look at when
it comes to taking taking a look at your application generally and and I mean it
generally it’s HELOC is is is like any other is like any other loan process and
loan application they’re gonna look at your credit they can look at your tax
returns they’re gonna look at your experience if you’re looking to do real
estate investing and they’re gonna also look at your overall financial strength
and also your financial statement so one of the first things that we want to talk
about is credit they’re obviously gonna take a look at your credit to see what
type of credit you have your credit history your credit report and there’s
this misconception out there that credit score alone approves for a loan now I
know there are some certain loan products out there where they’re not
gonna even look at your credit maybe maybe not but I’m gonna go ahead and
give you guys more mainstream ideas there are extremes right but I’m gonna
give you more the mainstream idea so it’s really easy to misconstrue that
credit score’s alone will give you an approval which is not true so credit
score’s right does not get you proof for loans
it gets you declined and here’s what i mean when it comes to applying for a
loan it’s kind of like the a CT or SAT score write the standard exam for
college entrance if I were if I were to be university or college and I’m looking
for students for at least 30 in there a CT scores and 30 and on I’m gonna go and
consider their application 30 and below I’m gonna decline them because they’re
not really quite up to our standards so the banks kind of look at the same way
they have a set threshold as far as what credit score they’re looking for above
that credit score they’re gonna say okay we’ll go and take a look and see what we
can do to prove or further further investigate and underwrite this
application now certain banks may say underneath this credit score under the
threshold we’re just gonna outright decline right there’s almost no chance
of this person getting approved for a loan notice I said almost right so
there’s always exceptions there’s always extremes and and different loopholes
right but as far as credit scores credit scores alone guys aren’t the
decision-making factors okay very important that we go through that also
the banks are gonna look at your tax return so most likely they’ll look at
your last two years of tax return it is 2018 so they’re gonna look at 2017
and 2016 tax return come next year in 2019 they would like to see the most
recent tax return which will be the 2018 and they want to see a 2017 tax return
all this because they want to make sure they verify that you have them you know
you’re making them money right you’re you got the the means to pay for the
loan right that’s really important for the banks and making sure that you’re
stable you have stable employment the certain banks may also ask you to turn
in pay stubs or your w-2 or your a bank statement now I did I have seen banks
where for example if you’re self-employed your tax returns may not
look good as some of the other w-2 counterparts so I I have seen banks take
a look at your bank statements the statements to see how much cash you’re
holding and what sort of asset you have to make sure that you’re being bankable
the banks also may see that may also check to see if you have any other
assets so do you have any vested stocks bonds mutual funds retirement plan made
me see if you have any other real estate do you have invested in gold or
commodities so they want to see the overall debt and
they also want to see the overall asset and banks preferably will like for you
to fill out what’s called a financial statement which is usually one or two
pages summary of your debt and your and your asset which gives which gives you
the equity of your your net worth so that’s what the banks would want to see
and the application guys and this is a little tip by the insider tip that I’ve
gotten over the years from experts and bankers banks also see how well you fill
out your application right if they see empty spots right empty you know form
then you’re less likely to be looked upon as a favorable application right
they want to see that you fill out your phone number if you have a second phone
number great they want to see email address right how to best contact you so
the more information they have about you the more likelihood that they can get
more of an accurate decision in an accurate data for them to make an
accurate decision based on your situation now of course as I said
there’s always extremes there’s always you know exceptions right in caveat so
it’s really important that you guys take this more of us as a general statement
or general conversation more so than any specifics so like I said guys we’re
gonna definitely have a Q&A interview with a banker right join us to address
any specific questions that you may have in the meantime if you want me to ask
any questions to the banker in your behalf guys go ahead and comment down
below we’d love to get some questions from you too the banker or if you want
to ask me questions awesome I’ll give you guys a little bonus tip before we
end this video if you’re looking to get a HELOC a home equity line of credit on
a rental property it is possible I know there’s some people that say well it’s
impossible for you to get a HELOC on a rental property well that’s not true
again we don’t want to speak in absolutes there’s always exceptions
there’s always you know situations that may allow the banks or allow an investor
to be approved for a HELOC so yes it is entirely possible for you to get
approved for a home equity line of credit on a rental property generally
what the banks will want to see is they want to see a ton of experience from you
ton of experience and also that you’re stable right obviously the
bank doesn’t want to lend on an LLC or a corporation especially when you’re doing
a HELOC yes it is possible for you guy he lops on around a property while it’s
rare it is possible so guys stick around do subscribe I will I will get a banker
to come on in our show we may just as well turn this into a live video so
we’ll do this live broadcast where you’re gonna where do you guys can
participate ask questions and get your answers live from a real banker instead
of me because I’m not a banker but I’m just speaking to you guys with my
experience dealing with the banks for many years so thank you for watching
guys be sure to stick around wait for that podcast to come around because I’m
excited for it and I think you guys are as well so guys take care well hello
there you made it to the end of this video congratulations and that probably
means that you liked our video and you loved what we did so be sure if you want
to get more information more YouTube videos from us about real estate
investing be sure to subscribe to our YouTube channel and hit the bio icon to
make sure that you get notifications on our future videos about real estate
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