Important Information on Home Equity Loans - Help and Information on Home Equity Loans

Important Information

Why comparison shopping and negotiation is a must.
It is important to understand that it is possible to obtain a better deal on a home equity loan through negotiating. A home equity loan is a product just like a car or house and the price is negotiable. Lenders and brokers may offer different prices for the same home equity loan terms to consumers, even if those consumers have the same loan qualifications. The most likely reason for this difference in price is that brokers and loan officers are often allowed to keep some or all of this difference as extra compensation or commission.

Usually, the difference between the lowest available price for a loan product and any higher price that the borrower agrees to pay is called an overage. When overages occur, they are built into the prices that are quoted to consumers. They can occur in both fixed and variable-rate home equity loans and can be in the form of fees, points, or interest rates. Remember that the quoted price of a home equity loan may contain overages.

When you receive a loan offer, ask the lender for one or more of the following:
     1) lower the interest rate
     2) lower points.
     3) waive or reduce one or more of its fees

Make sure that the lender is not lowering one fee while raising another or lowering the rate while raising points. There is nothing to be lost by asking lenders to give you better terms than the original ones thet have offered.

There is heavy competition amongst lenders in the home equity loan market and you need to use this to your advantage to find the lenders who are willing to give you the best deal possible. Comparison shop and negotiate with more than one lender. Let lenders know that you are comparison shopping to ensure that they give you their best deal quicker. At the very least, comparison shopping may give you 4 similar offers from 4 lenders. This should at least give you comfort in knowing that you are not being taken by an unscrupulous lender who is trying to take advantage of you.