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Lowest Home Equity Loan Rates |
The cost of a home equity loan comprises of
factors that include interest, real estate taxes, homeowner's
insurance, private mortgage insurance, processing charges, brokerage
commission, fees and closing charges. The structuring of interest
rate is subject to prime lending rate, stock market, inflation,
demand and supply in the loan market, and other aspects.
Your credit rating, loan to value ratio, period of loan (short-term
or long-term), quantum of down payment and location of residence are
also considered when a lender submits a quotation. Some of these may
leave scope for bargaining. The possibility of curtailing or
eliminating certain cost factors like commission (higher the rate,
more the commission to the consultant), do exist. With some
companies, the costs are lower because of their sheer efficiency.
Also, discounts are available from lenders in certain specifics.
Therefore it is advisable to shop around a bit and compare the cost
breakdown to decide the best buy. A lower interest rate alone may
not tell the whole story. It need not always mean the cheapest loan
and could even be a ruse to attract your attention. You can approach
agencies sponsored by U.S. Department of Housing & Urban Development
(HUD) for free counseling if necessary.
Low interest
rate may sometimes present a strange situation. For instance, a
15-year Fixed Rate Home Equity Loan would certainly bear a lesser
interest than a 30-year loan for the same amount. But your monthly
repayment would be considerably higher in the former case. You could
possibly opt for a 30-year loan and invest the difference between
the monthly installments more beneficially elsewhere. This should be
kept in focus when you try to decide on the type of loan. The
important thing is what suits you best and the rate and terms
offered by different lenders for that specific loan.
There is something you can do to obtain better terms from the
lenders-improve your credit rating. Getting advise is easy.
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