Compare Home Equity Lines of Credit
When shopping for a home equity line of credit, it's important to talk to two or three different banks to see what terms they can offer. Find out how banks tie their home equity lines to prime rates with help from a financial specialist in this free video on home loans and money management.
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Now you do own your home and you're needing a home equity line but you're not sure where or what bank you should go to to get your financing in place. Hi, my name is Matt McKillen, I'm with Innovative Financial Group. And the question is how do you compare different lines of credit. Basically what you want to look for when you're shopping for a line of credit, it's very similar to shopping for a car. You may want to talk to two or three different banks. Some banks offer better terms on home equity lines than others. Most banks tie their home equity lines to what's called the prime rate which is basically set by all the banks in the country and it's determined by what they're borrowing the money from, from the federal banks. Many banks out there offer home equity loans at prime minus which means that if prime for example which is now at 3.25%, they may offer you a start rate or a lifetime rate at prime minus half. Which would mean your rate would only be 2.75. So looking for a bank that has a below prime rate is definitely a reason to go with their program. Another thing to look for when shopping for your home equity line is are there any fees assessed with it. Some banks charge fees and some banks do not. So again to recap, look for banks that offer below prime as far as their rate on their loans and also look for banks that offer zero closing costs for that equity line of credit. Again, my name is Matt McKillen, I'm with Innovative Financial Group.