How to get a good home equity loan rate while rates are high

Interest rates have been high for some time, making it more expensive to get a loan if you need it. Credit card interest rates currently average 20%, and personal loan rates can reach 36%, depending on your credit score and other factors.

The good news is that if you’re a homeowner who has built enough. value in their homeyou can extract from this value using a Home equity loan. These loans typically have significantly lower interest rates than other financing options – currently, they average around 8%.

If you’re looking for a way to fund a big expense, a home equity loan is the way to go. Considerable. Read on to find out how you can get a good interest rate even in today’s rate environment.

Check today’s current home equity loan rates here.

How to get a good home equity loan rate while rates are high

Interest rates may be high, but you can still take steps to lower your home equity loan rate. Here are four to know.

Shop around

You are Not stuck With your original mortgage lender when it comes to getting a home equity loan. There are many lenders out there, and they are all competing for your business. Do your research and Compare top offers. To make sure you get the best rate available. You can always approach your existing lender with your results to see if they are willing to provide a competitive rate to keep your business.

Start your home equity loan search. Compare interest rates online now.

Don’t take on too much debt.

you Can usually borrow. Up to 85% of your total home equity, but that doesn’t mean you have to. The higher your loan amount, the higher your rate and the more interest you’ll pay. So, carefully calculate how much you really need to borrow and take out only that amount. There is no point in paying interest on money that you will not use.

Boost your credit score.

Your credit score is an important one. Consider factoring lenders When determining your interest rate. If your numbers are low, take some time. Make it better It can help you secure a lower rate. Aim for a score in the mid to high 600s. The more you can get it, the better your rate can be.

Consider a variable rate loan.

Most home equity loans have fixed interest rates, which means you’re locked into that rate when you take out the loan. If prices go down, you won’t benefit from them. In a high interest rate environment, a loan that offers a variable interest rate may be worth considering.

“Today’s interest rates are likely higher than they will be long-term, so choosing a variable rate is a wise option in many cases,” says Julia Colantovno, CFP, APMA, financial planner and founder of One Financial Design, previously stated. CBS News.

That said, a variable rate means you also run the risk of paying more if rates rise. If you prefer a fixed, reliable payment you can budget for each month, Colantuono advises that you can always refinance the loan if rates drop.

Find out how much you can borrow. Search for home equity offers here.

The bottom line

High interest rates don’t have to stop you from taking out a home equity loan. By shopping around, borrowing only what you need and building up your credit score, you can improve your chances of getting one of the lowest rates currently available. Variable rate loans are also worth looking into, as they are. HELOCs If you don’t need a lump sum immediately.