About Shopping for Home Equity Loans

Video Transcript

"Hi, this is Matt McKillen with Innovative Financial Group. The question posed to me today is, should I go out and shop for a home equity loan? The answer to that question is absolutely yes. There's a lot of banks out there that are vying for people's business, even in today's market where lending has tightened up. Most home equity loans, especially if it's an equity line of credit is tied to prime. Now prime is the rate of interest set by all the banks, based on the lower rate that they're borrowing money from the federal reserve. Currently at the time of this taping the prime rate is like three point seven five percent. So some banks in order to get your business, especially if you have a higher credit score, they may offer you a home equity line at prime minus a half a percent for life. So in that scenario you'd actually not be paying three point seven five, you'd be paying three and a quarter. So you'd be surprised that how different banks offer lower than prime rates and also a lot of the banks will offer their home equity lines of credit at zero or no closing costs. So take those stocks in to consideration when you go looking for that home equity loan. Because again, it is a competitive market. Just with credit cards, some credit cards have lower rates than others, and you may find a better deal by talking to a few banks in that process. Again, my name is Matt McKillen and I'm with Innovative Financial Group."