Trending Topics

Tips for Getting a Home-Equity Loan

As home prices began their long slide, banks pulled the plug on home-equity lending. Homeowners who had already snagged home-equity lines of credit lost out, too, as many received notice that their lines of credit had been frozen. Home-equity loan originations are still 80% below their peak, according to a recent report from Moody’s Analytics and Equifax. But as the housing market emerges from the doldrums, home-equity borrowing is beginning to perk up, too.

Pick your flavor. A home-equity loan, which usually comes with a fixed monthly payment and interest rate, is best for projects or purchases with a one-time, fixed cost, such as con­solidating debt. Home-equity lines of credit, or HELOCs, make sense for ongoing expenses, such as long-term home-improvement projects or college-tuition payments. HELOCs usually have a variable rate that’s tied to the prime rate, plus or minus some percentage. On a fixed-rate loan, a borrower with good credit (with a FICO score of about 720 to 740) may pay 6.5%; that same borrower would likely pay the prime rate (currently 3.25%) plus 1.5 to 2 percentage points on a HELOC, says Keith Gumbinger, vice-president of HSH.com, a mortgage-information site.

Shop smart. Compare terms from several lenders, including banks with which you already have accounts or loans. Those lenders may be willing to give you a break on rates or fees, says Nessa Feddis, vice-president and senior counsel of the American Bankers Association.

Read more: T-Rex Global

What people are saying

One thought on “Tips for Getting a Home-Equity Loan

  1. Stock market trading can be bit complicated for few stock traders who trade in equities without having the proper share market knowledge. Equity traders who don’t have time for research or lack bit of technical knowledge can avail Equity Tips from stock market experts and can gain from it. Trading without proper research is a sin and one should avoid it.

Leave a Reply

Back to top