Two Major Factors with Home Equity Quotes

There are two major factors to consider with your home equity quote: your limits and your rates. These two factors are not entirely independent of each other, but they do rely on different criteria during the application process.

How Limits are Determined

Limits for home equity loans are based mostly on the amount of equity you have in your home compared to how much debt you have. The bank may extend you limits beyond the amount of equity you have in the home if your income is very high. These two factors lead to your ability to pay. You will achieve higher limits if you have a higher ability to pay.

How Interest is Determined

Interest is mostly based on your past loan performance. The better you preformed on previous debt, the lower your interest rate will be. Your credit score is the measure of your debt performance to date. Check your credit before applying for a home equity loan to understand the likely rates you will receive. In general, home equity rates are higher than mortgage rates and more likely to be variable rates. However, you should aim for control over the adjustments in your home equity loan rates by coming to the table with excellent credit. 

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