2019's Best Home Equity Lenders
Let Your Mortgage Work for You
Discover the advantages of home equity and start funding your goals
2019's Best Home Equity Lenders
Discover the advantages of home equity and start funding your goals
2019's Best Home Equity Lenders
Updated May 2020
Advertising Disclosure
Loan Purpose Credit Score
Filters
Our Score
9.8
9.2
8.8
8.1
7.5
Direct Lender or Marketplace
Direct lenders provide loans to borrowers. Marketplaces help borrowers compare direct lenders.
Direct
Direct
Direct
Direct
Marketplace
Minimum Credit Score
580+
640+
630+
630+
630+
Minimum Down Payment
Lowest down payment across all mortgage products.
10%
0%
0%
0%
N/A
Bottom Line
View Rates without Hard Credit Pull
Specializes in HELOCs
Nation’s Largest Mortgage Lender
Fast Streamlined Application
Very easy-to-use questionnaire
Core Features
Advertises Rates
Market-Beating Rates
Pro
Digital Lender with Great Rates
Apply in minutes and close in days
Quick application and closure
Completely online lender
Very easy-to-use questionnaire
Con
No loans for manufactured homes
Only in 39 states
Live chat only available in business hours
No physical branches
No information about loan fees
Types of Loans
Fixed Rate
Conventional loan with fixed rate for duration of loan
Adjustable Rate
Conventional loan with adjustable rate for introductory period of 3-10 years
Non-Conventional Loans
Government-backed loans such as FHA, VA, and USDA.
Cash Out Refinance
Alternative way of using home equity to borrow cash
HE/HELOC
Loans and lines of credit that let homeowners tap into their equity to borrow large sums
Jumbo
Loan that exceeds FHA’s conforming limits, usually more than $424,100.
FHA
Government-backed loan for borrowers with low credit, with 3.5-10% down payment
VA
Government-backed loan for military personnel and veterans
USDA
Loans backed by Department of Agriculture for rural and suburban homes
Reverse Mortgage
Enables homeowners aged 62 and older to use their home equity to borrow
Operations
Customer Support
More Info
Bottom line
View Rates without Hard Credit Pull
Specializes in HELOCs
Nation’s Largest Mortgage Lender
Fast Streamlined Application
Very easy-to-use questionnaire
Introduction to Home Equity Loans
A home equity loan is a type of secured loan in which the borrower uses their home equity as collateral. Home equity loans are also known as “second mortgages” because they are secured against the home’s value, just like a regular mortgage. A home equity loan creates a lien against the borrower’s home and reduces the borrower’s home equity. As the borrower makes payments, their home equity begins increasing again. A home equity loan usually has a shorter repayment term than a traditional mortgage.
Types of Home Equity Loans
There are two types of home equity loan products: a closed-end or home equity loan, also known as a HEL; and an open-end or home equity line of credit, also known as a HELOC.
A HEL is like any other type of closed-end loan in that the lender pays the borrower a lump sum which the borrower must repay within an agreed payment term. Closed-end HELs come with a fixed interest rate, giving the borrower the convenience of knowing up front how much they are required to pay the lender each month.
A HELOC is a revolving line of credit with an adjustable interest rate. The borrower may draw funds at any time, provided they don’t exceed the approved credit limit. The borrower only pays principal and interest on the funds drawn.
Who Qualifies for a Home Equity Loan?
The basic requirement of a home equity loan is that you own your own home. At most, lenders permit homeowners to borrow up to a combined loan-to-value (CLTV) ratio of up to 90% (although some credit unions may allow 100% CLTV). In other words, a lender will not approve you for a home equity loan if it means your home equity drops below 10% of your home’s current appraised value. Generally, home equity loans can only be taken on owner-occupied properties, although it is technically possible to use a rental or investment property as collateral.
Aside from CLTV, all the other minimum requirements of mortgage or loan eligibility apply. You will need to be a U.S. citizen or resident aged 18 years or more. The lender will run a credit check, which will affect your credit score. And you will need to provide some paperwork, although less than for a traditional mortgage application.
Top Mortgage Lenders
#1
View Rates
Pros
  • Offers 3% down conventional loans
  • Loan experts are on hand to assist at any time
  • Full suite of non-conventional loans
Cons
  • No home equity loans
  • No weekend phone hours
AmeriSave Mortgage Corporation is a direct mortgage lender operating in 49 states and DC. Since 2002, it has financed more than $220,000 homes to the tune of $52 billion in funding. It is known for its competitive rates and streamlined application, with approvals in as quickly as 25 days. It offers a wide range of loans, making it a good choice for anyone looking to purchase a home or refinance their mortgage.
#2
View Rates
Pros
  • Apply in minutes and close in days
  • No need to wait for an in-person appraisal
  • Online video notary and support
Cons
  • Limited to 39 states
  • Only HELs, no first mortgages
  • Minimum credit score of 680
Figure is a fintech company that uses blockchain, artificial intelligence, and advanced analytics to provide consumer credit products. Founded in 2018, it offers its own unique versions of home equity loans (HELs) and reverse mortgages. By leveraging blockchain, the same technology that powers cryptocurrencies like Bitcoin and Ethereum, Figure is able to approve HEL applications immediately – and to send the funds to the borrower within 5 days
#3
View Rates
Pros
  • Nation’s largest lender
  • Quick application and closure
  • Option of physical or online applications
Cons
  • Rates aren’t always lowest
  • No home equity loans
  • Live chat only available in business hours
If you’re looking for an easy and comfortable loan, QuickLoans can help. Not only do QuickenLoans help ensure you get a mortgage that’s right for you to save time, but the platform ensures you are aware of your loans status 24/7 so you can keep track of what is required of you and what has already been done to avoid repeating steps that have already been completed, saving you time and confusion.
Can a Home Equity Loan Be Used for Anything?
Technically speaking, a home equity loan can be used for any large expense. This could include consolidating credit card debt or other debt; funding an unexpected bill, such as an unexpected medical procedure; financing a home improvement or refurbishment; purchasing a vehicle; or funding a child’s college tuition.
Generally, a home equity loan is best used for anything that improves your financial position, such as paying off debts or boosting your home’s value. Let’s say you’re struggling to keep up with payments to three separate credit card providers, all of which are charging high interest. With a home equity loan, you could pay off all those debts immediately and now start paying your home equity lender – at a lower rate and lower monthly payments.
What to Think About Before Taking a Home Equity Loan
Like any secured loan, a home equity loan or home equity line of credit carries certain risks. Before applying for a home equity lending product, you should always think wisely and do your own calculations.
The first thing to think about is which is more suitable for your needs: a HEL or HELOC. If you need a lump sum for a large payment, a HEL is best. If you need frequent, small sums, a HELOC is best. It works like a credit card but with better rates.
Another thing to consider is the purpose of the loan. As we mentioned above, home equity loans can technically be used for anything – but that doesn’t mean you should use them recklessly. When the housing market crashed in 2007-8, many homeowners found out the hard way what it means to have a lien against one’s home. When you secure a loan with your property, that gives the lender permission to seize the property if you default on the loan. When taking a home equity loan, always take caution against over-extending.
Home Equity Loan vs Personal Loan
In many ways, HELs and HELOCs are direct competitors to personal loans. Both involve borrowing money from a lender and using the funds for whatever purpose you need.
HELs and HELOCs are secured loans in which the borrower takes on some of the risk from the lender. As a result, home equity lenders generally offer far superior rates than personal loan lenders. In 2019, the average home equity loan rate was less than 6%, whereas the average person loan rate was around 11% and the average credit card interest rate was around 17%.
Unsecured personal loans don’t offer the benefits of home equity loans, but they also don’t carry the same risks. With an unsecured loan, there is no risk of having your home foreclosed or seized by the lender.
Home Equity Loan vs Cash Out Refinance
A home equity loan is one way of using your home ownership to finance a home improvement or major expense. An alternative way is a cash-out refinance, which involves converting your mortgage into a new, larger mortgage – and cashing out the difference between the two loans, minus closing costs and fees.
A cash-out refinance usually involves a better rate than a home equity loan, but higher closing costs and fees. Therefore, if you’re going for a smaller amount, a home equity loan is better. If you’re going for a larger amount, you may want to consider a cash-out refi. The exact decision depends on your home equity and your loan amount and on how much you’re able to afford in monthly payments. If you’re unsure which of the two options is best for you, it’s always wise to compare the numbers before deciding.
How to Find the Best Home Equity Loan
So, you’ve decided to take a home equity loan or home equity line of credit. Before you agree to anything, go ahead and compare a few lenders. To begin, this site provides a comparison chart and reviews of top lenders to help you compare rates, terms, minimum requirements, and more. To compare pre-qualified rates from multiple lenders, use a loans marketplace like LendingTree or go ahead and apply directly to several lenders. Once you see pre-qualified rates from 3-5 lenders, you should have a fair idea of what sort of rate you’re eligible for and which lender is the best fit for you.
Must Reads
Read All
Fed’s Near-Zero Rate Decision Means Cheaper Mortgages Probably on the Way
Surprisingly, mortgage rates went up immediately after the Federal Reserve slashed the benchmark interest rate to near-zero on March 15. This was probably just a temporary bounce, and in all likelihood mortgage rates will quickly begin moving downward again. In otherwise difficult times, low mortgage rates will bring cheer to people hoping to buy or refinance
Read More
Find the Best HARP Loans Lender
If you find yourself unable to refinance your mortgage because your home is falling in value, then there is a federal government program designed to assist you: the Home Affordable Refinance Program (HARP).
Read More
Find the Best VA Home Loans Lenders
VA home loans have helped more than 22 million veterans purchase their own home since the 1940s and continues to be available today through some of the nation’s best mortgage lenders
Read More
Answering the What, How and Why of Home Equity Loans
Is it a mortgage? Or is it a personal loan? If you’ve been searching the market for a loan, you’ve probably come across the home equity loan.
Read More
Best Lenders for FHA Loans
If you’re a home owner and find yourself in need of a large amount of cash to fund a major expense such as a renovation, medical expenses, or your kids’ college tuition, one type of loan you should consider is a home equity loan
Read More
Find the Best Lenders for First Time Home Buyers
If you qualify as a first-time buyer and have begun shopping around for a mortgage and a new home, we have good news to tell you: some of the nation’s best lenders will be willing to offer you a home loan with a down payment of less than the usual 20%. All you need to do in return is pay private mortgage insurance (PMI), which typically costs 0.5% to 1% of the value of the loan annually.
Read More
Guide to Mortgage Loans for Manufactured Homes
An estimated 20 million Americans live in mobile homes, and not all of them fit the overplayed stereotype of being poor. According to the most recent U.S. Census, there were 8.5 million mobile homes scattered throughout the country. Around 57% of these homes were occupied by at least one person in full employment, and an additional 23% were occupied by retirees.
Read More
10 Factors You Should Consider When Choosing Your Mortgage Loaner
If there is one thing that I have learned over my time, it’s that unless you’re a banker or a mortgage loaner, you probably don’t understand everything there is to know about mortgages. In fact, I’m willing to bet that you’re here because you’re looking for a mortgage loaner and aren’t sure where to start. This is where this guide comes in. When it comes to finding a mortgage loaner, it’s important to think everything through properly, which is difficult when you aren’t sure where to begin – so here are our top 10 things you should consider when choosing a mortgage loaner.
Read More
What is The Right Time To Refinance Your Mortgage?
If you’ve been weighing up whether or not to pay off your existing loan and replace it with another one, also known as refinancing your mortgage, then our handy guide is here to help. Sometimes refinancing sounds like a good idea on paper, but in reality it’s not always possible or practical. Lenders are tightening up their rules and regulations, making it more difficult to acquire a loan, so we’ve put together a complete guide to help you decide whether it’s the right time to refinance.
Read More
Types of Mortgages Loans
Whether it’s your very first home, or you’re moving for the third time in your life, moving house is always an exciting process. Amongst all of the giddiness though, there is usually a lot of stress involved. We all know that mortgages aren’t cheap, and that if we want to be able to cope with the monthly payments, we have to choose the right one for our needs and lifestyle. In 2017, homebuyers are left with a very difficult decision, as there are numerous types of mortgage loans on the market, all offering something unique but useful. If you’re amongst the thousands who are struggling to make a final decision, hopefully this in depth guide will help you to identify the right mortgage loan for you.
Read More
Why Credit Score Matters in Mortgage Applications
In most cases, maintaining a strong credit score is the most important thing you can do to ease your mortgage application process. You credit score and report help your lender determine your ability to pay back your home loan. Therefore, your lender will take into account your score and report when assessing whether to offer you a mortgage loan and when calculating your rate and terms.
Read More
Mortgage Industry Review 2017
American home buyers had a fantastic 2017, with the average 30-year fixed-rate mortgage falling from 4.32% to 3.95% (before rising back to around 4.5% by May 2018) and total home sales rising 1% to 5.51 million, the highest figure since 2006. Beyond that, there was plenty of other big news in the mortgage industry last year, which we recap in this article.
Read More
First Time Buyer Guide
Buying your first home is an equally exciting and daunting process. After months of renting properties, or even living at your family home, you finally have the money ready to begin the process… But where do you start? There are several legal and financial steps to take before you can buy a home. Read on for our complete first time buyer guide, which will help you get to grips with all of the steps required to purchase your very first house.
Read More