New The Best Home Equity Loan Lenders of June 2022


Owning a house gives you a valuable asset that you can tap into for various purposes, ranging from major purchases to debt consolidation to home improvement.


And with an explosive housing market driving up home prices right now, many Americans' homes are more valuable than ever. The average homeowner has gained approximately $51,500 in home equity in 2021, according to a recent report from housing data firm CoreLogic.


A home equity loan and home equity line of credit (HELOC) both allow you to borrow against the value of your home and repay the debt over time. It’s also possible to get a cash-out refinance, which replaces your current mortgage with a new, larger one, leaving you with a cash payment on top.


But just because you may have increased home equity, doesn't mean that you should definitely cash it out. All three methods of home equity financing come with their own pros, cons, and risks, including the risk of foreclosure if you fall behind on payments. In addition, you should carefully consider whether taking on additional debt is a good move given your personal financial situation.


But if you need an accessible, affordable source of financing for large expenses, a home equity loan could be a good choice this year. Mortgage rates are extremely low. Just be sure to shop around with multiple lenders to get the best interest rate, and have a clear plan for paying off the loan.


Here’s what you need to know about home equity loans, how they compare to other types of home equity financing, and the best home equity loan lenders we recommend.



Best Lenders for Home Equity Loans

Discover

Discover is well-known for providing credit cards, but it also has a full suite of banking and lending products, including home equity loans.


Discover charges no upfront fees — including origination fees, appraisal fees, and mortgage taxes — making it one of the best home equity loan options. On top of that, a variety of repayment options ranging from 10 to 30 years make this a flexible choice. However, it's important to note that if you pay off your balance within 36 months, Discover might claw back some of the closing fees it waived on your behalf. Also, because the minimum loan amount is $35,000, Discover might not be appropriate for those who need smaller amounts.


BMO Harris

BMO Harris only has branches in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri, and Wisconsin, but it's possible to access a home equity loan in other states. You can get a rate quote online if you live in one of the states where there's a branch. For residents of other states, you need to call for a rate quote.


BMO Harris is one of the best home equity lenders because it offers a variety of options in terms of loan amounts and term lengths, making it easier to tailor your loan. BMO Harris also covers your closing costs so you don't pay anything upfront, but you might end up repaying your closing costs if you pay off your balance and close your account within 36 months.


U.S. Bank

U.S. Bank was established in 1863 and is one of the largest national banks in the United States. You don't need a U.S. Bank checking or savings account to apply for a home equity loan, but you can only get access to the lowest advertised rates if you set up automatic payments from another U.S. Bank account. Its streamlined online process makes it easy to apply from almost any device.


In addition, the U.S. Bank offers a wide range of loan amounts, from $15,000 to $750,000 (or $1 million in California) and doesn't charge closing costs. The best rates are available for those with shorter loan terms and a loan-to-value ratio of below 70% — meaning you'll need at least 30% equity in your home. You might also need a credit score of more than 730 to qualify for better rates.


Connexus Credit Union

Connexus is a credit union available in all 50 states, with fee-free ATMs and cooperative institutions that make transactions easy, including managing your account online. You can become a member of Connexus by opening any account with the institution, including a home equity loan. Even though Connexus is available in all 50 states, the credit union doesn't offer home equity loans in Alaska, Hawaii, Maryland, and Texas.


Connexus is one of the best home equity loan companies because it makes it easy to process home loans online without the need for an appraisal. However, the loan terms aren't as flexible, with terms of five to 15 years, rather than allowing terms of up to 30 years.


Regions Bank

Regions Bank only offers home equity loans on properties located in states where there are Regions branches. As a result, the property in question must be located in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, or Texas.


While Regions Bank offers limited availability for home equity loans, if you are in an eligible location, you could benefit from the high loan-to-value ratio ceiling and the ability to choose a loan term of between seven and 20 years. Regions also offers autopay discounts ranging from 0.25% to 0.50%. While Regions Bank will cover the loan closing costs, late payment fees could be charged if you don't make payments on time.


TD Bank

TD Bank prides itself on having some of the longest bank hours, including on the weekends, and excellent customer service. TD Bank offers 24/7 customer service by phone in English and Spanish, as well as additional options to contact support via Facebook Messenger or Twitter DMs (available hours may vary). TD Bank offers home equity loan amounts starting as small as $10,000, which can make it attractive for those with smaller projects. Additionally, TD Bank offers a rate discount of 0.25% for autopay out of another TD account.


However, getting information about home equity loans online can be difficult without putting in your location. You must be located in Connecticut, Delaware, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia, and Washington, D.C. in order to get information about rates and available products online. Fees are also hard to find, with the schedule directing you to look at loan docs for information.


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