Can you get a home equity loan with a different bank?
Inflation's high and with a potential recession looming you might be looking for some help making ends meet.
Fortunately, if you're a homeowner, it might be easier than you think.
Homeowners have access to financial products that other consumers don't. And one of the best options? That'd be a home equity loan. With home equity loans, you can pull money from your home equity, using it to pay bills, improve your house, or just as a financial safety net.
Are you considering getting a home equity loan? You can easily explore your options here now.
Can you get a home equity loan with a different bank?
While it's definitely possible to get a home equity loan using the same bank that originated your mortgage, it's not necessary by any means.
As Ray Williams, executive vice president at mortgage lender New American Funding, explains, "You are not bound to your current lender or mortgage servicer if you're interested in a home equity loan. If you enjoy working with your current company and they offer home equity loans, you can certainly work with them again, but you are not required to do so."
With any mortgage loan — home equity loans included — you should shop around for your lender. Mortgage lenders vary widely on their home equity loan requirements, terms, fees, and interest rates, so shopping around is critical if you want to get the best deal.
Start shopping for home equity loans here to find the best one for your needs.
Why would you use a different bank for a home equity loan?
You might want to use a different lender if you've been unhappy with your current one. Maybe their service hasn't been great, or you've had payments marked as late that weren't. Either way, choosing a new lender for your home equity loan could help you avoid these challenges on your new loan.
The biggest reason to choose a different lender, though, is simple, Williams says: "Another company may be able to make you a better deal."
"There are many different options available from many different companies, and you want to make sure you consider all of them," Williams says. "Compare the interest rate, price, quality of service, and a number of other factors. This will help you make an informed decision about which company to work with and which home equity loan is right for you."
How would a home equity loan work with a different bank?
A home equity loan is a second mortgage, meaning it's a loan that's in addition to your first mortgage loan. It won't impact your main mortgage at all and will act as a wholly separate loan, with its own payments, due dates, interest rate and terms.
Because of this, getting a home equity loan with a different bank is simple. You pick the lender you want to use, fill out their application, close on the loan and make payments to that lender moving forward.
What to do next
If you're considering getting a home equity loan and are happy with your current mortgage lender, feel free to get a home equity quote from them. Just make sure you consider a few other lenders, too. This will ensure you get the best possible deal for your needs and budget.
Depending on your plans for the loan, you can also consider a home equity line of credit (HELOC). These also let you borrow from your home equity, but they work more like a credit card, allowing you to withdraw funds as needed over time.
