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Home Line of Credit Rates

When you start searching for a home line of credit you need to pay close attention to the interest rates charged.

The home line of credit rates determine how much your home line of credit will cost you. Finding a lower home line of credit rate can save you money and make it easier to pay off your home line of credit. A higher home line of credit rate will cost you more and make it harder to pay off your home line of credit.

The home line of credit interest rate is usually about the same as the mortgage rate. The best home line of credit rate you’ll get is the same as the mortgage rate. There are a number of factors that can cause you to pay a higher home line of credit rate.

How Home Line of Credit Rates are Determined

Lenders use a number of factors when determining the interest rates on home lines of credit. The most important factor in this determination is the homeowner’s credit rating.

Homeowners with good or excellent credit will pay a lower interest rate on a home line of credit. A homeowner with a bad or poor line of credit will pay a higher interest rate on a home line of credit.

This means that a homeowner should take a look at their credit report before applying for a home line of credit. Cleaning up a person’s credit by eliminating negative information from a credit report can raise the credit rating and help a homeowner get a better interest rate.

Homeowners may also face a higher interest rate if they live in certain areas. The other major factor used in determining home line of credit rates is geographic locations.

How to Get a Good Home Line of Credit Rate

A homeowner can get a better line of credit rate by comparing line of credit offers on line. There are many websites that allow a homeowner to compare line of credit offers and line of credit rates.

Typing the words home equity line of credit into a search engine can help a homeowner locate several websites that specialize in lending. Using the calculators at such a website, a homeowner can locate several line of credit offers.

Comparing the lines of credit offered on these websites can help a homeowner find the best interest rate possible. Getting a lower interest rate can help a homeowner save hundreds of dollars on interest.

Adjustable Rate vs. Fixed Rate

A homeowner should try to get a fixed rate of interest on a line of credit. A fixed rate of interest gives a homeowner the same rate of interest for the life of the line of credit. This can help a homeowner keep the same low rate of interest for years.

There is another kind of interest rate on a line of credit that a homeowner should try to avoid. This is an adjustable rate of interest. With an adjustable rate the lender has the power to raise the interest rate at some point in the future. This can enable the lender to increase the payments on a line of credit.