Best Home Equity Loan Rate

Finding the best home equity loan rate seems simple enough. You just look around at advertising and find the lowest number, right? Wrong. That is way too simple! The advertised rate can be any number of things. It is an advertised rate, but it may not be the rate that you personally qualify for. It may be the simple interest rate and not the compounded APR (annual percentage rate) interest rate. The advertised rate probably is not today’s current rate, as rates are subject to change daily or weekly, or that advertisement may be very old and have an old rate listed.

Beyond the simple number that is advertised, be aware that advertising is totally designed to grab your attention and to get you to do something, especially make an application for that loan. Many websites and lenders will claim to have the best home equity loan rate. It is only when you look further into the small print, disclaimers and subject-to-change clauses that you will learn what the interest rate could become. With application fees, monthly fees, variable interest rate increases and other things the loan may be subject to, that advertised rate could sink well below the actual rate you end up paying.

To find the best home equity rate, consult several current and reliable resources. There are business cable television and Internet websites that post up-to-the-minute rates and changes. Try looking at www.bankrate.com or CNBC or FOX cable television business news programs for updated loan rate information. Go to your credit union or local bank and ask the banker what is their best home equity loan rate. In general, if you find one around 4.25% to 8.5%, today, those are good rates. Obviously, you want the lowest one, but if you have had some credit record adverse notations about missed payments or things like a bankruptcy, your credit score will be lower, and you will not be able to take advantage of the lowest “best” rates of the day. You will be able to get the “best” rate for your individual situation, according to the many factors that go into creating a home equity loan.

The best home equity loan rate should be a fixed rate, and as low as you can negotiate. This makes your payment schedule much more manageable than if the loan were to be set at a variable rate, as happens with adjustable rate mortgages. Ask your banker if there is a lower rate you would qualify for. Perhaps if the loan were for a shorter term, the rates would be less. Do not rush into a home equity loan because a rate looks low, without investigating everything about that loan. You are putting your home at risk of loss if something happens to make payments so high you cannot make them on time or at all. It never hurts to ask, and it is always good to compare rates. Find the best home equity loan rate for your individual needs and qualifications, but do not rush to sign on the dotted line.