When looking into any kind of mortgage loan, it's only natural to want to go where you feel comfortable. However, when homeowners obtain a Home Equity Line of Credit (HELOC), home equity loan or cash-out refinance from their existing bank or credit union, they sometimes miss out on potential savings, better offers and more flexible terms.
According to Freddie Mac, getting one additional rate quote from an additional lender can sometimes help save a borrower an estimated $1,500 over the life of their loan.
And remember: when shopping for the best loan to suit your needs overall, rate is just one factor you should consider. Explore options online and look beyond your traditional bank. And beyond better rates, if you're looking to access cash, traditional banks can often offer lower maximum cash amounts than other lenders. In other words, it often pays to shop around.
Rates will vary among lenders—what's right for you?
With a conventional loan, 30-year fixed-rate mortgages can vary by more than half a percentage point among lenders. Considering how a home is usually the most expensive purchase many consumers will ever make, every small decrease in your rate can lead to huge savings.
Look twice at Lender Fees
Along with variations among interest rates, different lenders may have different fees and charges associated with closing your loan. To add even more confusion, the names for these fees can even vary from lender to lender. But if you're looking for a no-obligation, no-nonsense conversation about your home equity options, we're happy to help.
Choose your lender based on your goals—not the other way around
You may have seen in the news how home values and "tappable" equity are at all time highs. Even Newsweek has been reporting on the record amounts of home equity available. So ask around and be sure the lender you choose will allow you to access the amount of equity you need to achieve your goals.
Home improvement projects, tuition costs, debt consolidation: These are just some of the reasons why homeowners look to tap into their home's equity. And when they do, it's essential they can tap the percentage they need to accomplish what they have in mind.
What's the point of "Discount Points"?
Discount points give a homeowner the option of decreasing your interest rate by paying for "points" upfront. Each of these points costs about 1% of the overall loan amount and can generally reduce your interest rate by approximately 1/8% to 1/4%.
Don't settle for a inflexible lenders
Different lenders can often vary on their rate lock and adjustment policies. For instance, some lenders will allow for a one-time adjustment if mortgage rates fall during processing, while others may charge for this or not allow it. That's why it pays to do your homework and ask plenty of questions upfront to avoid surprises down the road.