Where can I get a home equity loan
CoreLogic estimates that the average American homeowner has just over $334,000 of equity available. This is a record according to CoreLogic estimates for the third quarter 2022. Many lenders offer home equity lines or loans to enable homeowners to tap into this equity and obtain cash for other needs. This is a growing business, since the rise in home values and home prices in 2020. No matter what your financial goals may be, you can apply for a home equity loan now.
What are home equity loans?
The difference between the current value of your home and the amount you owe on your mortgage is your home equity. It is easy to calculate. This equity, which is your ownership interest in your home, can be used to borrow against. Two primary products use your home equity to secure collateral: A HELOC (a type of credit line with variable interest rates — similar to a credit card); and a Home Equity Loan, which is essentially a second mortgage at a fixed rate.
Where can I get a home equity loan
You used to get a HELOC (or home equity loan) from your local bank. Although many banks still offer them, you can find them at other institutions.
Banks
Home equity is offered by banks like Fifth Third Bank, Citizens Bank, and Bank of America. If you are already a customer, you might be able to benefit especially from them. Some banks, such as Citibank and Wells Fargo, have stopped their home equity business due to the pandemic. They are yet to resume it.
Credit unions
These can be local, regional or national and are driven by members who share common factors such as location or profession. Alliant Credit Union, PenFed Credit Union are two examples.
Lenders of mortgages
You might also consider working with CrossCountry Mortgage or Lower if you purchased your home from a mortgage lender such as CrossCountry Mortgage, Lower, or Lower. Rocket Mortgage and Guaranteed Rate offer home equity products.
Online-only
Online lenders can be found in established companies like Discover, as well as newer ones like Figure. Spring EQ allows borrowers to access equity up to $500,000, as well.
How to select a lender for a home equity loan
There are many options for home equity loans beyond the bank. It’s important to compare lenders to get a better idea of which offers the lowest interest rates, fees, and the best conveniences or perks.
Rob Cook, vice-president of marketing, digital, and analytics at Discover Home Loans, says that a lender should be open with customers about the loan process. He also adds that fees and costs are important to consider for anyone looking for a loan.
You should know how much money you are eligible for a home equity loan. Don’t accept a lower amount than what the lender offers you. Don’t forget: The loan is a tap on your equity, an asset. You must be able repay the loan to avoid losing your home.
Before you sign up for a loan, make sure to fully understand all costs. Home equity loans are similar to primary mortgages. While many home equity lenders offer attractive rates, they may charge higher fees.
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