How to Find the Best Rates on Home Equity Loans

Home equity loans are a good option for financing home improvements or paying for unexpected bills. But whether you're refinancing your current home equity loan or opening a new account, it's important to find the best rate. Finding a low rate could save you hundreds, even thousands of dollars over the life of your loan. And you should also be prepared to evaluate costs, such as closing and appraisal fees.

Step 1

Review your current loan statement if you are refinancing a home equity loan. When comparing rates, it's important to understand what type of home equity loan you have. Your loan statement should indicate if you have an 80-percent or 100-percent home equity loan. The interest rates are typically lower on 80-percent home equity lines of credit, so make note of which type of loan you have. This information is typically on the back of your loan statement.

Step 2

Check out E-Loan, which is an online financial institution. Since they don't have the expense of physical branches, E-Loan offers some of the most competitive rates. You can apply for a loan by filling out an online application and waiting 24 to 48 hours for approval. You will need to provide your Social Security number so a credit report can be run and the physical address of the property so they can evaluate the value of the property.

Step 3

Check out Bank Rate, which is a company that allows you to compare home equity loan rates online. You can check bank and credit union rates across the nation, or enter your zip code to narrow the search.

Step 4

Search nationwide rates with Lowest Rate, a company that allows you to compare home equity loan rates online. You can find low rates offered by large financial instructions, and also some smaller community banks you didn't think about.

Step 5

Search for home equity loans at Mortgage Loan. They have a search tool that allows you to compare nationwide home equity rates, or you can narrow your search by entering your zip code. They also have a quick comparison chart on their home page, if you don't have time to complete a more detailed search.

Tips and Warnings

  • If you are refinancing your home equity loan, ask about prepayment penalty fees. Check with your current lender if there are prepayment penalties for paying of your home equity loan early. These fees can range from $300 to $500, depending on the lender.

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