Where to apply for a home equity mortgage
CoreLogic estimates that the average American homeowner holds just over $334,000 worth of equity. This record-breaking amount is according to CoreLogic’s third quarter 2022 estimates. There are many lenders that offer home equity loans or lines of credit for homeowners who want to tap into the equity. It’s a popular way for them to get cash for their different needs. You can now get a home loan, regardless of your financial goals.
What is a home equity loan?
Home equity is simply the difference between your home’s current value and your mortgage debt. Calculating it is simple. You can borrow against this equity — the ownership stake you have in your home. You can borrow against your equity by using two main products: a HELOC is a type credit line that has a variable rate, similar to a creditcard; and a home equity loans, which are essentially second mortgages with a fixed interest rate.
Where can you get a loan for your home equity
A HELOC, or home equity loan, was traditionally offered by your bank. They are still offered by many banks, but there are many other types that offer them.
Banks such as Fifth Third Bank, Citizens Bank and Bank of America offer home equity options. They may be especially beneficial to you if your current customer is one of them. Some banks like Wells Fargo and Citi have temporarily ceased home equity operations due to the pandemic.
These may be regional, national, or local and are driven primarily by members that share the same interests as each other, such as their location or profession. Alliant Credit Union or PenFed Credit Union might be two of the more notable examples.
Lenders for mortgages
CrossCountry Mortgage and Lower are mortgage lenders that you may also be interested in working with. Rocket Mortgage and Guaranteed Rate now offer home equity programs.
Online lenders include both established players such as Discover and newer players such as Figure. Spring EQ is also available, which allows some borrowers to access upto $500,000 equity.
How to choose the right home equity loan lender
You have many other options than the bank for a home equity loan. Compare different lenders so that you can compare them and get an idea of which ones offer the lowest fees and most convenient perks.
Rob Cook, vice president marketing, digital and analysis for Discover Home Loans says “you should look for an lender who is upfront about the whole loan process, especially what requirements are required to obtain a loan.” He adds “costs and fees will be an important consideration for anyone looking into a loan.”
Know exactly how much equity you need before you apply for a loan. The lender might offer you more than you asked for. Keep in mind that you are tapping into your equity — an asset. To repay the loan, you will need to be able.
Before accepting an offer, ensure you fully understand all expenses. Like primary mortgages, home equity loans have closing costs. Although many home equity lenders might offer low rates, some may charge higher fees.