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2021's Best Home Equity Lenders
Let your mortgage work for You
Discover the advantages of home equity and start funding your goals
2021's Best Home Equity Lenders
Discover the advantages of home equity and start funding your goals
2021's Best Home Equity Lenders
How We Score
We show product scores to help you choose the right mortgage for you. Here’s how they’re calculated
Our brand scores, which are rated on a scale up to 10, are a sum of the TrustPilot and User Engagement scores
TrustPilot Score
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
User Engagement Score
Our User Engagement score is rated on a scale of 3.00-5.00, and is calculated based on the number of clicks a brand’s chart listing has received in the past 7 days. The greater the proportion of clicks a specific brand receives relative to the other brands listed on the chart, the higher their user engagement score.
The User Engagement score is calculated separately based on the user’s device (mobile engagement is scored independently of desktop engagement, for example), and also by the specific type of mortgage loan they are comparing.
The brand’s chart position is influenced by the compensation we receive from such brand. In some cases, this may also impact a brand’s User Engagement score.
Our Score
7.8
Good
Our brand scores, which are rated on a scale up to 10, are a sum of the TrustPilot and User Engagement scores
Based on 8,446 Reviews
4.2
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
7.0
Fair
Our brand scores, which are rated on a scale up to 10, are a sum of the TrustPilot and User Engagement scores
No reviews on
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
No available score
No available score
Type of lender
Direct
Marketplace
Marketplace
Marketplace
Bottom line
Digital lender with strong reputation
Specializes in cash-out refis
Lets you compare rates
Largest mortgage marketplace
Top feature
Variety of closing cost options
No impact on credit score
No registration required
One application, multiple offers
Key figures
Repayment terms
10-30 years
10, 15, 20, 30
10, 15, 20, 30
5-30 years
Credit Score
620+
620+
620+
620+
Max CLTV
97%
97%
97%
95%
Loan Types
Home Equity Loan
HELOC
Cash-out Refinance
Reverse Mortgage
Operations
More Info
Bottom Line
Digital lender with strong reputation
Specializes in cash-out refis
Lets you compare rates
Largest mortgage marketplace
Our brand scores, which are rated on a scale up to 10, are a sum of the TrustPilot and User Engagement scores
Based on 8,446 Reviews
4.2
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
1
Low Rates
  • Get pre-qualified in 3 minutes
  • View rates without hard credit Pull
  • Digital lender with strong reputation
7.8
Good
View Rates
Read Review
Our brand scores, which are rated on a scale up to 10, are a sum of the TrustPilot and User Engagement scores
No reviews on
TrustPilot is an open, global platform where users write product reviews and assign products a star rating. In the event that a product does not have a TrustPilot score, their score will be based solely on the User Engagement score (see below).
2
  • Very easy-to-use questionnaire
  • Over 200 direct lenders on the partner database
  • No impact on credit score
7.0
Fair
View Rates
Read Review
Introduction to Home Equity Loans
Home equity loans are a type of secured loan in which the borrower uses their home equity as collateral. This type of loan is often used to finance major expenses such as home improvement, medical expenses, or college tuition fees. A home equity loan creates a lien against the borrower’s home and reduces home equity. As the borrower makes payments, their home equity increases again. A home equity loan usually has a shorter repayment term than a traditional mortgage.
Types of Home Equity Loans
Home equity loan
A home equity loan 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 home equity loans usually come with a fixed interest rate, giving the borrower the predictability of fixed monthly payments for the life of the loan.
Home equity line of credit (HELOC)
A HELOC is an open-end 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. Like a home equity loan, a HELOC may involve closing fees at the start of the loan.
How to Qualify for a Home Equity Loan
The basic requirement of a home equity loan is that you own your home. At most, lenders permit homeowners to borrow up to a combined loan-to-value (CLTV) ratio of 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 in some cases it may be 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 certain financial documentation, although less than for a traditional mortgage application.
Our Top Mortgage Lenders
#1
View Rates
Pros
  • Offers Fannie Mae 3% down conventional loans
  • Loan experts are on hand to assist at any time
  • Full suite of non-conventional loans
Cons
  • Rates not advertised publicly
  • No weekend phone hours
  • Not licensed in NY
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
  • Quickest way of comparing home equity lenders
  • Results in your inbox in seconds
  • No need to give sensitive info (such as SSN)
Cons
  • Not an actual broker or lender
  • Your phone could ring off the hook
HomeEquityQuiz is a free service that connects home buyers/owners with mortgage and home equity loan offers from top lenders. When you use the HomeEquityQuiz service, its powerful algorithm scans hundreds of lenders to find your best match. HomeEquityQuiz works with all types of lenders, from lenders specializing in home equity products (HEL, HELOC) to big-name national lenders.
#3
View Rates
Pros
  • Easy way of quickly comparing the market
  • Generates results in seconds
  • No social security number needed
Cons
  • You could receive lots of calls from lenders
  • Not an actual broker or lender
Amerivalue is a free online platform that matches home buyers with mortgage lenders. It boasts a massive network of hundreds of mortgage lenders – from national lenders to small, local lenders. After you complete the short online form, Amerivalue crunches your information and connects you to top lenders in seconds.
Purpose of a Home Equity Loan
Technically speaking, a home equity loan can be used for any large expense. This could include consolidating credit card debt or other debts; 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 replace those high-interest debts with a single, lower-interest repayment to your home equity lender.
While a home equity loan can technically be used for any purpose, that doesn’t mean it should be used 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 foreclose the property if you default on the loan. When taking a home equity loan, always take caution against over-extending.
Alternatives to Home Equity Loans
Cash-out refinance
A cash-out refinance is when the new mortgage is greater in value than what you owe on the old loan, allowing you to cash out the difference. A cash-out refi usually involves a lower 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.
Home equity investment
A new type of home equity loan alternative gaining in popularity is a home investment, where a financing company invests in your home in exchange for a share of your home’s future sale price or market value. There are a number of different versions of this on the market, but the principle is more or less the same in all cases: you get the cash up front, and the financing company shares in your home’s appreciation when you sell.
Personal loan
An unsecured personal loan is the easiest way to get your hands on quick cash because it doesn’t involve any collateral and the process is very quick, with funds by the next business day. Personal loans beat home equity loans and cash-out refis for convenience, but beware: the interest rates are usually much higher. While the average cash-out refi or home equity loan rate in 2021 is 3-4%, the average personal loan rate is 10-20% - which can send your monthly payment soaring.
What to Look for When Comparing Home Equity Loans
Loan type
We described a number of home equity loan types and alternatives above, including traditional home equity loans, HELOCs, cash-out refis, and home investment products. Carefully consider all the options to figure out which is best for you.
Maximum LTV
Combined loan-to-value (CLTV) is as important a factor in refinancing as a down payment is when purchasing. If you only have 20% equity in your home, then you won’t qualify for a home equity lender with maximum 80% CLTV. Therefore, always compare lender maximum LTVs to find one that suits you.
APR
A home equity loan might not be like your original mortgage, but it is still a loan and the interest rate (or APR, taking into account the interest rate and certain other costs) is still the most important factor in determining your monthly repayment. Always compare a few lenders to find the best rates for your financial and credit profile.
Terms
A home equity loan term can range from 5-30 years although most lenders allow 5-15 years. HELOCs usually allow up to 10 years to withdraw funds and maximum 20 years to repay. The best repayment term for you depends on how much you can afford in monthly payments. The shorter the term, the higher your monthly payments but the less you’ll pay in interest over the life of the loan. The longer the term, the lower your monthly payments but the more you’ll pay your lender in the long run.
Ease of application
Gone are the days when you had to walk into a physical branch to apply for a home equity loan or HELOC. These days, the best mortgage lenders let you apply for a home equity loan online, sometimes through a fully automated online mortgage platform and other times with phone assistance from a loan agent. If convenience is important to you, then keep an eye out for digital-friendly lenders.
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Guide to Zero and Low Down Payment Mortgages
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Refinance Rates and Costs: Everything You Need to Know
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No Closing Cost Mortgages Explained
While searching for mortgage lenders, you may have come across the intriguing term “no closing cost mortgage”, also known as a “zero closing cost mortgage”. In this article, we’ll explain the meaning of a no closing cost mortgage and give you the tools to decide if it’s right for you. But before explaining the meaning of a no closing cost mortgage, we first have to understand the concept of closing costs.
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Complete Guide to Home Equity Loans and HELOCs in 2021
Owning your own home has many advantages, one of which is the leverage it gives you when you need to finance a major expense like a home improvement or debt consolidation. While non-homeowners are restricted to paying 10-20% interest for a personal loan, homeowners have the option of borrowing at 3-7% with a home equity loan in 2021.
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10 Factors To Consider When Comparing Mortgage Lenders in 2021
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Credit Score: Key to Getting the Best Mortgage Interest Rates in 2021
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