3 things to do when comparing home equity lenders
Thanks to rising home prices over the past few years and today's very high interest rates on most types of borrowing, using home equity as a financing option may be appealing for many homeowners.
Home equity loans and home equity lines of credit (HELOCs) may charge lower interest rates than other lending products since they're secured by your home. Plus, the interest you earn may be tax-deductible if you use the money for qualifying home improvements. Today, some of the best home equity rates may be as low as 7% to 8% APR.
While finding a great interest rate is important, you'll also benefit from choosing the best home equity lender. Below, we'll go over a few things you can do when comparing lenders to help you make the right choice.
Compare today's best home equity rates to see how much you could save.
3 things to do when comparing home equity lenders
Here are three things you can do to make sure you find the best home equity lender for your goals.
Compare different offers
It's always a great idea to shop around and compare different options before taking on a loan or line of credit — you don't need to stick to your current mortgage lender. Prequalifying can help you take the comparison one step further.
When you prequalify with a lender, you can get an even better idea of the exact loan terms and interest rates you'll qualify for when you apply. You may also be able to see details like your monthly payment and what fees to expect. Prequalifying generally does not affect your credit score since it only requires a soft credit check. However, you should always check the specific details with each lender.
Check out what rates and terms you qualify for with a few different lenders to get a good range and ensure you're getting the best deal. Get started here by comparing some of the best home equity rates available today.
Read reviews
Like any other product, customer reviews can tell you a lot about the quality of your potential loan and what type of experience you might have. Remember, taking on a home equity loan or HELOC means you'll be withdrawing from and repaying that equity for potentially decades to come, so it's important to choose a trustworthy source of financing.
Some things to look out for include customer service responsiveness, whether the application process is straightforward, transparency about account fees and terms and options for accessing your account.
Look for any special characteristics
Different lenders may specialize in different loan types or benefits, so it can pay to look closer at the details on a lender's site beyond just the interest rate.
For example, if your credit score isn't quite in the "good-to-excellent" range typically required to access home equity, you might turn to a lender you can qualify for with lower credit. Or, maybe you'd like to access more of your home equity than the 80% to 85% that's typically available. Some lenders may allow you to tap into nearly 100% of the equity you have in your home.
These special cases can prove to be more costly or have additional fees or requirements. But you may benefit over the long term by looking for loans that fit your individual circumstances and lending needs.
Explore today's best home equity rates that you can qualify for here.
The bottom line
Home equity loans and HELOCs can be a big financial undertaking, which is why it's important to find the right lender. If you're considering tapping into your home equity while home prices are high, it pays to shop around and save. Before you apply, read customer reviews for lenders you're considering and check for any special benefits for your individual financial situation. And don't forget to prequalify to find out exactly what terms you can get.
