How To Find the Best Home Equity Loan Rates in Wisconsin

For many Wisconsin homeowners, tapping into their home equity can be a strategic financial move that can aid in funding home improvements, debt consolidation, or any other major expenses that require a significant injection of cash. However, as with all major loans, finding the best home equity loan rates is a critical step in maximizing benefits and minimizing costs. In this blog post, we’ll explore some of the key steps of finding the best home equity loan rates Wisconsin has to offer.

 

What Are Home Equity Loans?

Before we get into the intricacies of home equity loan rates and how to make sure you’re getting the best deal, let’s answer a more pressing question: what are home equity loans?

A home equity loan is a type of loan that allows homeowners to borrow against the equity they have in their property. Equity is the difference between the home’s current market value and the outstanding mortgage balance on the principal. Calculate yours here. It’s the value of your home that you own outright, and it builds every time you make a payment against your loan principal. If you made a down payment when you purchased your home, that amount is also included in the total equity.

The longer you’ve had your mortgage and been making regular payments, usually, the more home equity you have available. So if you’re a fairly new homeowner, you may want to wait a little while before trying to tap into your home’s equity. You’ll definitely have access to higher dollar amounts when you do borrow.

Since monthly payments are split between repaying interest and repaying principal, it can take a while to build equity in your home, but there are other factors that can help boost equity too. Because equity is simply the value of the home minus the remaining mortgage principal, if anything increases the value of your home, your home equity also increases. For instance, if home prices in your area rise or you make renovations or other improvements, this increase in value goes into your metaphorical pocket as cold, hard equity.

Because you are leveraging something very valuable as collateral—your home—home equity loans are considered lower risk for lenders. This means they often come with better terms than personal loans or credit cards, making them a stable and relatively affordable financing option.

 

How To Find the Best Home Equity Loan Rates in Wisconsin

Now that we’ve covered the basics of home equity loans, let’s look at how you can find the best home equity loan rates.

Assess Your Financial Situation

Before you embark on your home equity journey, take time to evaluate your financial situation. Consider your credit score, your existing debt, and any changes that might be coming your way in the future. Lenders use factors like these to determine what rates you might qualify for, so taking stock beforehand can help you be prepared.

Research Wisconsin Lenders

There are hundreds of lending institutions all across the Badger State that offer home equity loans, from national banks to local credit unions like Capital CU and even online lenders. Identify your options, and don’t just look at a few; you should cast a wide net to ensure you get the best terms available to you.

Look for lenders with a solid reputation and good customer reviews. Some lenders might specialize in home equity loans, which could mean they have the ability to offer better home equity loan rates to Wisconsin borrowers or have other benefits that make choosing them worthwhile.

Compare Interest Rates and Fees

Here is where we get to the meat and potatoes, so to speak, of comparing home equity loan rates. Interest rates play a significant role in determining the overall cost of the loan, so it can be tempting to just look for the lowest interest rate and sign the deal. However, don’t forget to consider any associated fees. Common fees that you might see associated with a home equity loan are origination fees, appraisal fees, or closing costs.

Most institutions will require similar fees, but if the fees seem hidden or if the lender is putting more of the financial burden here in order to offer low interest rates, those can be red flags. Look for a lender that is up front about costs and requirements. It’s vital to work with a lender you can trust fully.

Remember to always evaluate the loan package as a whole, not just based on interest rates.

Understand the Loan Terms

The term you choose for your loan amount, along with the interest rate, will determine your monthly payment. Some borrowers prefer shorter terms to pay off loans more quickly, while others prefer the flexibility that comes with longer terms and lower monthly payments, even if it means paying more overall.

These are just a few of the things borrowers can do to find the best home equity loan rates in Wisconsin. Another thing that you can do? Contact Capital Credit Union. We serve northeast Wisconsin homeowners and homebuyers. We offer great rates and terms on mortgages, home equity loans, and more. Learn more about our home equity loan options today.