| Having an even 3-point better interest rate on your | | | | consider a home equity line of credit as well. This is a |
| home equity loan can save you over $1,000 in annual | | | | great option if you are not sure exactly how much you |
| debt payments (on a loan of $50,000). Here are 4 tips | | | | will be borrowing over the next couple of years. The |
| for getting the best-possible home equity loan rates. | | | | potential risk factor is that the rate is not fixed and as |
| Tip #1: Pull your credit report: Even though your loan will | | | | it is usually tied to the prime rate. |
| be lent against the equity in your home as collateral, | | | | Tip #4: Compare rates: Once your credit score is in |
| the rate for which you are eligible is still based largely | | | | tip-top shape and you have decided that a home |
| upon your credit score. If you have not pulled your | | | | equity loan is your best option for securing cash, I |
| credit score in months or years, go ahead and do so | | | | suggest starting with your current mortgage lender to |
| now. You can get a free copy of your report at the | | | | find out their best rate. Then, use that as a point of |
| Federal Trade Commission-authorized Web site. | | | | comparison and go online to shop for rates. There are |
| Tip #2: Polish your credit score: If you have poor or fair | | | | a number Web sites that allow you to compare rates. |
| credit, improving your credit score just 50 points or so | | | | Before selecting a loan on a given site, be sure to read |
| can save you $1,000 or more in annual home equity | | | | the fine print about associated costs and fees. |
| loan payments. While an applicant with good credit | | | | For homeowners, a home equity loan can be a great |
| might have a rate of 1/2 point below prime, someone | | | | way to secure cash. To get the best rate, be sure to |
| with fair or poor credit might pay 1 to 5 points over the | | | | check and then improve your credit score. Once you |
| prime rate. Bonus: borrowers with better credit can | | | | have decided that the timing is right to apply for a loan, |
| often avoid application or appraisal fees as well, which | | | | shop for rates on any credible Web site that will allow |
| can add up to significant savings. | | | | you to compare among multiple lenders. And, be sure |
| Tip #3: Consider a home equity line of credit as an | | | | to read the fine print before signing on the dotted line. |
| alternative: Before you apply for a home equity loan, | | | | |