Home Equity Loan Interest Rates to Expect

Home equity loan interest rates are often lower than other personal loans because they are secured against the value of the equity you have in the home. Secured loans offer a lender more assurance against loss. That being said, your interest rates will depend on your credit score as much as they depend on the asset you are placing as collateral.

The value of your equity will be used along with your income and other factors to determine the size of the limits you may be extended on your home loan. Limits and interest rates are largely set independently of each other. However, lowering the limits on your loan may get you a better interest rate.

For the most part, interest rates on these loans will be higher than mortgages because they are slightly riskier to the lender. The lender is assuming a subordinate position to the primary lien holder on the home. You will find

Exact interest rates on your home equity loan will mostly rely on your credit and the terms you choose for the loan. The better your credit, the lower your rates. If the rates are too high for your liking, you can offer less favorable terms, such as higher monthly payments. 

 

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