If you have equity in your home and need extra cash for home repairs, education costs or to consolidate high-interest debt, then a home equity loan might be a good option for you. Before signing the dotted line, however, you should be sure you are receiving agreeable loan terms from a trustworthy mortgage lender; a home equity loan is a significant debt, often set up to be paid back over a lengthy repayment term. With this type of loan, securing fair and current home equity loan rates is essential to safeguarding your healthy financial future.
How to Access the Lowest Current Home Equity Loan Rates
With a home equity loan, you will likely have a fixed rate on the total amount borrowed, meaning your interest rate will stay the same throughout the life of your loan. Lenders determine your interest rate by using a current market base rate (such as the Wall Street Journal Prime Rate) and additional pricing factors based on requested loan terms and perceived risk.
You can access the lowest interest rates by shopping rates on different loan terms and also by shoring up your credit history prior to applying for a home equity loan. Credit scores range from 300 to 850. Higher scores translate to stronger credit history and creditworthiness, and will speed up the approval process. To improve your credit, make payments on time, pay off any collection accounts and avoid opening up new credit accounts before taking out a home equity loan.
Are Minimal Closing Costs in Addition to Current Home Equity Loan Rates Too Good to Be True?
When taking out a home equity loan, interest rates are not the only expense to consider; closing costs can be significant, too. Depending on the loan amount, closing costs can quickly add up to thousands of dollars. According to Zillow, they average around three to six percent of the loan amount.
Although it might seem too good to be true, at America's Credit Union we offer home equity loans with both current, competitive rates and minimal closing costs. Depending on your particular loan request, some closing costs (all disclosed up front) will likely be unavoidable, such as appraisal fees, credit reports, recording fees and title company expenses. We, however, charge no loan origination fee on home equity loans, which puts us ahead of the competition in terms of the cost of taking out a home equity loan. In addition, we charge no application fee, have no early payment fees and no prepayment penalties.
Ask a Mortgage Lender if a Home Equity Loan is Right for You
If you think a home equity loan could improve your financial outlook, we encourage you to visit with an experienced mortgage lender at America's Credit Union. Our loan committee takes a personal approach to mortgage lending, and we will work with you to determine the home equity loan terms that will fit into your budget while also accommodating your future financial goals. Email us at info@americascu.org.
