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Discovering Where The Lowest Home Equity Loan Rates Are
By EchoBay Loans Staff Writer

When you're shopping for a car or a home, or are conducting any other large transaction, you should never just jump on the first offer you come across. Most consumers shop around for the best price in order to save money and get the best value for their dollar. The same should be done when deciding to take out a home equity loan.

Home equity loans have become increasingly popular and many consumers are using them to put the equity in their homes to work for them. If you're one of the people who have decided to cash in on your home's value, you're going to want to make sure you do it wisely. Home equity loan rates vary from lender to lender, and if you want to make your dollar stretch, you're going to want to find the lender who is offering the best home equity loan rates.

Finding the lowest home equity rates is really just a matter of knowing where to look and what type of lender to go with. In the past, getting a home equity loan consisted of driving down to your local bank and filling out a lengthy application. Your bank knew that you were not likely to hop from bank to bank, and they knew that the competition was relatively nonexistent. The interest rates that they charged reflected this.

Now gone are the days of the bank-driven home equity loan rates, and ushered in are the days of the consumer-driven home equity loan rates. There are now a number of financial institutions specializing in home equity loans. In addition to local banks, people are now going to credit unions and online mortgage brokers to get the lowest home equity loan rates available. The banks know this, and the home equity loan rates available to consumers reflect this new financial era.

This does not mean that you can automatically assume that your local bank is charging a low interest rate in order to compete with other lending institutions. It's still important for today's consumers to shop around for the lowest home equity loan rates. Prior to the advent of online lending, comparing loan rates meant calling numerous banks and credit unions and checking into the rates that they were currently charging.

However, thanks to modern technology, finding the lowest rates is just a matter of surfing the web and comparing rates online. Not only can consumers find the rates of their banks and credit unions via the institutions' websites, they can also visit online brokers and other online lender websites that will allow them to compare a number of lenders' home equity loan rates simultaneously.

Traditionally, credit unions have provided borrowers with lower home equity loan rates than banks have. This is because credit unions are nonprofit organizations that work for their members, whereas banks are for-profit companies that need to pull in tidy profits for their shareholders. Another option that more consumers are looking into when obtaining their home equity loans are the various online lenders.

Many times, online lenders are able to provide the lowest home equity loan rates because they have effectively cut out the middle man by conducting their loan origination online. This means that the commission that would normally be paid to the loan originator is money that the lender does not have to part with, and those savings gets passed on to you, the consumer.

When shopping for the lowest home equity loan rates, make sure you compare the total APR from one lender to the next, and make sure that each of the APRs is calculated using the same formula. If you do check the current rates with your local lending institutions, make sure that you also compare those rates to home equity loans that are currently available online so you can be sure that you are getting the best deal possible. As with any transaction, a consumer that shops around is an informed consumer.

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