One.
Choosing the right home equity loan can be tricky; you have to
consider interest rates and repayment schedules, among others.
Choosing the right lender, however, does not have to be a
difficult task. If you ask the right questions, you can pick
the best lender for your needs. The following is a list of seven
essential questions that you should ask any potential lender.
1. What are the terms? This will include interest rates and the
length of the loan. Some lenders may require you to carry
private mortgage insurance or to pay your mortgage through ACH
deposit. Get the terms in writing, so that you can compare them
with other lenders.
2. How about my credit? Your credit score may play a huge
factor in deciding which lender to go through. If you have bad
or no credit, many lenders may not be able to help you. So you
will want to find a lender that offers sub-prime loans for
borrowers of your credit status. Bad credit does not
necessarily disqualify you for a loan, but it will make the
process a bit more difficult.
3. What is their reputation? The lender will delve into your
personal and financial history, so why shouldn't you do the
same? If the company is public, you should have no trouble
finding financial and news information. Look for recent mergers
or restructurings that could indicate a potential problem. Be
weary of lenders that are not publicly traded. Many lenders use
the same underwriters, so do your homework beforehand.
4. How much will the loan cost me? Closing costs can be a major
concern for most homeowners. You probably need the home equity
loan because you are short on funds or in debt, so coming up
with a few thousand dollars for closing costs can be all but
impossible for many borrowers. Your lender should be able to
provide you with a good faith estimate (GFE) that will outline
the fees that you will be responsible for.
5. How long is the process? A typical home equity loan, should
not take more than a month on average. Ask your lender how long
the process will take from the initial application to receipt of
the funds. This can be particularly critical if you are needed
to do repairs on your home, such as purchasing a new water heater.
6. Is the staff knowledgeable? Never underestimate the power of
a good customer service representative. Ask the loan officer
and others in the office the various questions that you have.
They should be knowledgeable on the loan process, and be able to
guide you through the process.
7. Early payment penalty? If you won the lottery or got a big
raise, would you be able to pay your loan off early? Many
people forget to ask this question when choosing a lender, but it
can save you thousands of dollars. So, make sure that if you
choose to sell your home before it is paid off, you will be
covered.
Use your common sense when choosing a home equity loan bank.
Research the company just as you would with any major purchase.
Don't be afraid to ask questions, and to try another lender if
you don't get the answers that you desire. It is your home and
your money on the line, so do your homework!
John Ross is a freelance author who writes articles about
financial loans including: http://www.loanchbox.com/ ,
http://www.loanchbox.com/online-home-equity-loans.html , and
http://www.loanchbox.com/home-equity-loans-fixed.html The
Loanchbox is a user friendly website designed to inform
beginners about home equity loans.
This article is free for republishing
Source: http://www.articlealley.com/article_5076_19.html
Keywords: bad credit, borrowers, choose one, closing costs, credit score, financial history, gfe, good faith estimate, home equity loan, home equity loans, homework, interest rates, lenders, private mortgage insurance, recent mergers, repayment schedules, restructurings, sub prime loans, thousand dollars, underwriters.
