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Home Equity Loan Business

Some of the nation’s largest lenders are making a big push to boost their home equity lending business and are planning to move salespersons from mortgages to home equity lending once refinancing becomes less popular. They are making home equity loans much easier to get so homeowners will keep borrowing once the interest rates for refinancing rise and mortgage refinance becomes less attractive. Some incentives are, pre-approving some customers and allowing online applications. Some lenders have even went so far as to allowing first mortgages and home equity lines of credit at the same time. This would increase the amount you can borrow as you pay down your mortgage and your home’s value increases.

Acquiring your mortgage and home-equity line from the same lender can make sense, especially if you are a good customer, the lender may give you a break in the rate or fees. If this is not a path you want to take you should contact several lenders not just the ones who call you or send proposals in the mail. Talk with banks, savings and loan companies, credit unions mortgage companies and mortgage brokers. Bare in mind brokers do not lend money, they help arrange home equity loans.

Be sure to know who you are talking to. Many loan officers or people who refinance mortgages know little about home equity loans and home equity lines of credit, others may not receive commissions for certain loans, therefore, they have no incentive to send you somewhere else even though it might save you money.

It pays to negotiate with more than one lender. You should not be afraid to make lender and brokers compete for your business. Let them know you are looking for the best deal and try to get them to lower the points, fees and interest rates. Then ask others to meet or beat the terms of other lenders.