If you’re like most people these days, you probably feel a little nervous about home prices and home loan rates. But, if you do a little research, you can still find a good rate and qualify for a home equity loan.
Read on and we’ll show you how!
- Don’t bother using a mortgage broker; in most cases you only pay higher fees and loan points, especially if you need a home equity loan versus refinancing an existing first mortgage.
- Do shop for your home loan online and compare rates; by checking multiple lenders and mortgage companies online, in most cases you can save substantially versus just applying with your bank.
- If you can qualify, you may be better off going with a home equity loan (often referred to as a second mortgage) as opposed to a home equity line of credit (HELOC). Typically the payment schedule entails making equal payments that pay the entire loan off in a specific period of time.
- Be sure you know all the terms and charges associated with the loan product you choose. The Truth in Lending Act requires your lender to disclose the costs and terms of home equity plans, including the APR, payment terms, any miscellaneous charges and other pertinent information about variable rates.
- Remember that if the equity loan is against your primary residence, the Truth in Lending Act allows you three days from the day you open an account to change your mind for any reason.