How to Get Great Home Equity Loan Rates

In many ways, home equity loan rates are impacted by the same factors that determine traditional loan rates. Think you have no control over the home equity loan rates you’re being offered? There are some facts you should know.

Your home equity loan rates are going to be higher or lower, depending on the industry standards at the moment. Economic factors that drive interest rates are a complex topic, but suffice it to say that you should take advantage of low rates when they’re available.

Home equity loan rates are also impacted by the individual borrower, and this raises a note of caution. Don’t be taken in by a company promising ridiculously low home equity loan rates. If it’s significantly lower than the industry standard, there’s probably a catch. One of the common “catches” is the need to meet specific criteria in order to quality for the advertised home equity loan rates. If you don’t have an excellent credit rating, a very high amount of equity and a loan that will be significantly lower than the market value of the house, you’ll be given higher home equity loan rates. Does that mean you shouldn’t apply when a company advertises low rates? Of course not. It only means that you need to read the fine print before you start the process. Determine if you’re likely to qualify for those low home equity loan rates, or if the advertisement is just a gimmick to attract potential clients.

If you have a poor credit history, get ready to pay higher home equity loan rates. This works just like any other credit application. You may be approved, but the loan may carry some penalties in the form of higher interest rates and less desirable terms. If you can meet those terms and make every payment on time, you may well qualify to refinance the home equity loan at better rates and terms at some point in the future.

A home equity loan can be an answer to many of life’s problems, ranging from high-interest credit card debt to home improvement projects. Finding good home equity loan rates takes only the same effort you put into getting an initial home mortgage loan.

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