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Home Equity Loan Fees
The
Federal Truth and Lending Act requires lenders to disclose the important
terms and costs of their home equity plans, including the APR, miscellaneous
charges, the payment terms, variable rate information. You usually get these
disclosures when you receive an application form. You will also receive
additional disclosures before the plan is opened. If any of these terms
change before the plan is opened, and you decide not to follow through, the
lender must return all fees.
Borrowers
need to pay close attention to fees. If you don’t understand terms and
conditions ask questions, knowing the monthly payment amount and interest
rate is not enough. Remember, from a bankers point of view home equity lines
are safe and highly profitable. It always pays to shop around before you
sign on the dotted line. Fees and terms vary greatly. Some points to look
for:
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Application or loan processing fee
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Origination or underwriting fee
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Lender or funding fee
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Appraisal fee
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Document preparation and recording fees
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Broker fees (which may be quoted as
points)
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Interest Rate ad-ons.
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Rates on home equity lines can vary by
as much as two percentage points.
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Some lenders offer an "initial rate". Be
sure to find out how long this rates lasts (usually six months) and what
the final rate will be after the "initial rate" expires.
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Annual fee (to keep the line open)
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"Non-usage" fee for borrowers who do not
draw down on their lines.
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For both home equity loans and home
equity lines of credit you may be hit with a early-termination fee of a
couple hundred dollars if you pay off the home equity loan /line and/or cancel it
within 3 years.
Introduction
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Line of Credit |
Rate Charges |
Loan Fees |
Loan Features |
Right
To Cancel |
Loan Business
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