Comparing Home Equity Loans
Not all home equity loans are created equal. The best home
equity loan may not be evident at first glance. You should,
therefore, be diligent about comparing home equity loans before
signing on the dotted line.
Know the market – Be aware of the current interest rates
for home equity loans. They are generally higher than interest
rates for first mortgages. Rates on second mortgages also vary
widely amongst lenders. Also know how the comparable homes in
your area are valued.
Compare like terms – Home equity loans may have a fixed
rate or adjustable rates. The length of the loan terms may vary.
Some lenders charge an upfront fee as high as one percent of the
loan amount. Does the loan have an early termination fee or
prepayment penalty?
Consult several lenders – The Internet has become a prime
resource for finding home equity loans but try to find potential
lenders from other sources as well. Have a least one
conventional bricks and mortar bank on your list. Solicit
references from your friends.
Get it in writing – The only true way to compare home
equity loans is to have each proposal submitted to you in
writing. Go over each package line by line. Compare the items
included in one fee closing costs. Look at the total amount you
will pay over the life of the loan not just the interest rate.
Ask questions – Your home is probably your biggest asset.
Don’t be afraid to ask questions if there is anything you don’t
understand. Walk away if the lender won’t discuss your loan with
you.Here are our recommended home equity loan lenders online:
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