Many borrowers use Florida home equity loans to pay off existing debt, be it personal or commercial debt, which is quite a paradox because applying for such a loan is actually applying for more debt. Nonetheless, many residents of Florida and other states use this type of loan to provide a temporary sense of security.

Florida equity loans are most popular when interest rates are low, although with a home equity loan, borrowers often end up paying more over time because of the long length of the loan. Most borrowers apply for a home equity loan in Florida in order to:

1. Make improvements to their home;

2. Make major purchases such as a new car or vacation;

3. Provide capital to start a new business;

4. Consolidate debt, often paying off credit cards or student loans.

Action Steps
The best contacts and resources to help you get it done

Get information on home equity loan rates in Florida

Your credit score will affect the kind of home equity loan rates in Florida you will receive, but do some shopping around to make sure you're getting the best deal possible.

I recommend: Local banks usually offer competitive home equity loan rates in Florida. Check out the Bank of Florida, which offers home equity loans as part of its Consumer and Residential Lending Department.

Prove your income to qualify for a great home equity loan in Florida

To get the best rate possible, you will need to prove that you make enough money to satisfy Florida home equity lenders. Be sure to keep pay stubs from your job from the last two pay periods. If you do not make enough money on paper to obtain a loan, consider having a co-signer or other source of income that you can prove, such an annual grant you receive. If you cannot prove your income, perhaps because you are self-employed, you can also obtain a Stated Income loan, in which you tell your lender what you make without having to provide documentation. You would instead just prove that you are employed and have assets.

I recommend: Apply online for a home equity loan at Chase, a popular lender that specializes in such loans. Wells Fargo has a fast, easy process to find out if you have been approved. The rate calculators on the website also are helpful.

Examine your loan-to-value ratio when trying to obtain low Florida home equity loan rates

The loan-to-value ratio, or LTV, is another aspect that lenders look at when deciding what interest rate to give. The loan-to-value ratio is the relationship between the dollar amount of the loan and the sales price or appraised value of your home, depending on which one is lower. If your house is worth $200,000 and you still owe $50,000, your LTV is 25%. Generally the LTV must be less than 80% LTV.

I recommend: Try Peoples National Bank, a small local bank serving communities such as DeFuniak Springs with a range of banking services, including home equity loans.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  A Stated Income or Stated Assets loan might sound great for some people, but realize that these types of home equity loans in Florida often carry a higher interest rate, and you have to have excellent credit to obtain them. For this reason, only use this type of loan if you cannot in any way prove your income.