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Home >> Lending >> Home Equity
Turned Down for Home Equity Loan: Why?
We applied for a home equity line of credit. We owe approximately $76,000 on the house, which is worth $191,000, and wanted another $30,000 to use to pay off credit cards and as a buffer. Our credit score is over 800, and we have about $10,000 (4 cards) in credit card debit. We make all our monthly bills on time, and own a business. I am wondering why a bank would turn us down for this type of loan?
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 Lenders have their own standards for creditworthiness within broad ranges. The bank is required to provide you with the principal reasons for its decision not to approve your application. If you didn't get a statement of those reasons in writing or a notice, you can ask for it. If you don't understand or agree with what the bank has said, you certainly should contact the bank and ask for a fuller explanation. You also have a right to a copy of any appraisal of your home's value that the bank used in its evaluation of your application, and if the bank tells you that information from a credit reporting agency was involved in its decision, you will have a right to a free copy of that report and to dispute any information in the report that you believe to be incorrect.
Published on BankingQuestions.com 8/25/09
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