How to Get a Fixed Interest Rate Home Equity Line of Credit
A home equity line of credit---revolving credit in which your home acts as collateral---can help you pay for a child's college education, large medical bills or major home-improvement projects. Most lines of credit come with variable interest rates, which can change during the life of the line of credit. Though it's more difficult, you can qualify for a home equity line of credit with a fixed interest rate. You'll just need to bring excellent credit to the table.
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Things You'll Need
- Copies of two most recent tax forms
- Copies of two most recent paychecks
- Copies of bank savings and checking account statements
- Copies of retirement savings account statements
Instructions
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Gather the paperwork you'll need to prove to banks that you can afford to pay back any money you borrow on a home equity line of credit. This includes copies of your two most recent tax returns, your checking and savings account statements, your two most recent paychecks and your retirement savings account statements.
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Search the Internet for banks that offer a fixed-rate home equity line of credit, or call local banks and ask if they offer this product. Most lines of credit come with variable interest rates, so your options won't be many.
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Call or visit the banks you've selected and speak to someone who deals with home equity lines of credit. Tell this person you are interested in a home equity line of credit that comes with a fixed, not variable, interest rate.
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Explain to the bank representative that you have a good credit score and a low amount of debt. This is critical to qualifying for a fixed-rate line of credit, as banks are more likely to award this product to customers who have already established a history of paying their bills on time.
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Send in your financial paperwork. Banks will require this as they begin to process and approve a home equity line of credit.
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Tips & Warnings
Some home equity lines of credit only allow you to borrow money for a certain amount of time before the line is closed. Make sure you know all the terms of your line of credit before signing up for it.
Remember that your home serves as collateral on a home equity line of credit. Make sure that you can pay back the money you borrow. If you can't, you could lose your home.
