Your Average 30-Year Fixed Home Equity Loan

The national average fixed home equity loan rate varies depends on the amount of money that you borrow. The rates that are available for home equity loans can be from 5.25 %, for a loan of $30,000, to 8.5 % for a HELOC of $75,000. There are other factors that affect the loan rate you receive for a HELOC and not all types of lenders are in the business of extending these types of loans.

Average Home Equity Interest Rates

These rates are based on an average of loan rates for HELOCs for a borrower with a good credit score of between 660 to 749 FICO. The rates published at bankrate.com show the following average rates for a HELOC, 30-year fixed loan, as of January 2010:

  • $30,000 HELOC, 5.24 %
  • $50,000 HELOC, 4.96 %
  • $75,000 HELOC, 8.49 %

Obtaining Specific Information and Requirements

You should check with the holder of your mortgage for specific details about the rates that are available for HELOCs that they offer and the basis for determining how you may qualify. Average loan rates will give you an idea of where the market currently stands.

Where the market stands and what rate you receive can be significantly different because your lender will use your credit, LTV and other factors to determine your rate. Also, larger banks and lenders who received funds from the Troubled Asset Relief Program (TARP) have been reducing their loan portfolios in order to cleanse their books and lower their liabilities. Many community banks and non-TARP borrowers have been more willing to extend loan term for home equity and other types of mortgage products.

Checking Your Credit Score

Your credit score will affect your home equity loan rate. Your credit score is determined by the number of favorable and unfavorable credit reporting items as well as your ratio of debt to equity. If you have more debts that you can pay or past due and overdue items these will cause your credit scores to fall. The published acceptable range for credit scores is at 660 FICO, which is the standard reported by the three major credit reporting agencies.

You should check your credit score annually to make sure that the items reported properly reflect your credit situation and that your reports do not contain erroneous information that should be removed. Each of the credit reporting bureaus, Equifax, Experian and TransUnion are required under the Federal Credit Reporting Act of 2001 to provide this information to you free of charge upon written request.

Negotiating Rates with Your Lender

If you are interested in taking out a home equity loan you should shop around with different lenders in order to find rates and terms that are acceptable and affordable for you. Your mortgage holder may be the first stop to make but may not necessarily be the only lender. Be willing to negotiate terms based on the stated averages and justify your need for the money.

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