Best Home Equity Loan Lenders
With home prices recently at all-time highs, more homeowners are considering accessing their home equity. Whether it's to finance home improvements, consolidate debt, pay for college or do something else, a home equity loan can be a good option for a relatively low-interest-rate loan.
Before submitting your application, compare the best home equity loan lenders, understand the pros and cons of this type of loan and learn about alternative financing options.
Our pick for low starting APR: LendingTree
Our pick for large loan amounts: Northpointe Bank
Our pick for quick closing times: Rocket Mortgage
- Our recommendations are based on what reviewers say.
- 4,243,660 reviews on ConsumerAffairs are verified.
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Rating | 3.7 | Pending | 4.0 |
# of reviews | 1,555 | 0 | 1,181 |
Our pick for | Low starting APR | Large loan amounts | Quick closing times |
Minimum credit score | 620 | 680 | 640 |
Maximum LTV ratio | 85% | 96% | 80% |
Repayment terms | 360 months | 360 months | 95 - 360 months |
Read Reviews | Read Reviews | Read Reviews |
More details about our top picks
The best home equity loan lenders give you the option to borrow an amount that puts your combined LTV ratio at 80% or more, work with borrowers with a variety of credit scores and have quick closing times, along with repayment terms of up to 30 years.
- Minimum credit score: 620
- Closing costs: 2% - 5%
- Repayment terms: 360 months
LendingTree is a financial marketplace where borrowers can receive quotes from multiple lenders by submitting a single application. You can get quotes for home equity loans, mortgages, student loans and more.
It's our choice for a low starting annual percentage rate (APR) because you can easily find the lender with the lowest rates. To get a personalized quote, simply complete a quick application on its website.
- What we like
- Receive multiple quotes from lenders through a single application
- Easily compare quotes in one location
- Transparent pricing with rates, fees and other details
- What to consider
- Not an actual lender
- Possible spam or too many calls after application
- What reviewers say
- Borrowers like the ability to save time by filling out just one application in order to receive multiple offers. They are generally happy with the lenders they meet through the service. A reviewer from Little Rock, Arkansas, said: “I filled out a mortgage inquiry on LendingTree and received phone calls almost immediately from lenders about my inquiry. The process was easy and put me in contact with the right lender based on my information.”
However, many of the online complaints suggest that borrowers can quickly become overwhelmed by the number of calls and emails they receive. One reviewer from Youngstown, Ohio, complained that his phone "was hammered with calls in five minutes as soon as I hit submit."
- Minimum credit score: 680
- Closing costs: 2% - 5%
- Repayment terms: 360 months
Northpointe Bank is a full-service bank based in Michigan offering personal and business deposit accounts, as well as home loans and insurance products. It has loan officers throughout the country to meet borrower needs. It is our choice for large loan amounts because homeowners can get up to a 96% combined LTV between their mortgage and home equity loan (maximum loan amount is $3 million).
Starting APRs are competitive, and closing costs are generally between 2% and 5%. The time to close the loan is around 15 days, and loans are available in all 50 U.S. states.
To apply for a home equity loan, use its website to search for an advisor or submit details for pre-qualification.
- What we like
- LTV ratio of up to 96%
- Rate discounts available
- Repayment terms from five to 30 years
- What to consider
- Higher credit score requirement
- Rate and fee information not listed on website
- Cannot complete an application online — can only submit basic loan request information
- What reviewers say
- There are no reviews of Northpointe Bank from ConsumerAffairs readers.
- Minimum credit score: 640
- Closing costs: 3% to 6%
- Repayment terms: 95 - 360 months
Rocket Mortgage is our choice for quick closing times on home equity loans, with the company stating that it takes approximately one week to close. The closing times on Rocket Mortgage loans are expedited through a streamlined online process in which necessary documents can be obtained directly from your bank and investment accounts. This feature saves time and frustration.
Closing costs range from 3% to 6%. The maximum LTV ratio is 80%, and the maximum loan amount is $2.5 million. There is also a $1,200 mortgage processing fee. Loans are available to borrowers in all 50 states.
Rocket Mortgage offers mortgages, personal loans, auto loans, financing for solar installations and more. Homeowners can apply for a home equity loan directly from its website.
- What we like
- Link your bank and investment accounts
- Online to-do list keeps borrowers up to date on process
- High maximum loan amount
- What to consider
- Requires submitting an application and a soft credit pull to view rates
- No branches for in-person services
- What reviewers say
- ConsumerAffairs reviewers have mostly favorable opinions of Rocket Mortgage and its service. Customers compliment how easy and quick the loan process is. They also appreciate being able to upload documents and sync their accounts to handle all of the document requests. A ConsumerAffairs reviewer from Massachusetts said, "Rocket took care of me and made sure I was up to speed with everything."
Compare Top Home Equity Loan Reviews | ||||||
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| Offers conventional, FHA and VA home purchase and refinance loans with fixed and variable rates. Publishes rates online. Online application process. No lender fees for qualifying borrowers. Available in 43 states. | ![]() | View Rates Call Center Open (949) 242-7816 | |||
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| Conventional, FHA, VA and jumbo loans. Refinancing options available to lower payments, change terms or take cash out. Minimum credit score requirement: 580 to 620. Available nationwide. | ![]() | View Rates | |||
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| Online-based mortgage lender. Offers home loans for purchases and refinances. Provides a mobile app and multiple online homebuying tools. No in-person assistance. Available in every state and Washington, D.C. | ![]() | ||||
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| Online lender with multiple mortgage and refinancing options. 24/7 online services and Learning Center. No in-person assistance. Works with credit scores as low as 580. Available in every state and Washington, D.C. | ![]() | View Rates Call Center Open (800) 762-5471 | |||
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| Online-based full-service bank. Offers a variety of loan types, including conventional, jumbo, FHA, VA, construction and home equity loans. Also offers HELOCs. Available nationwide. No physical branches. | ![]() | Get a Quote Call Center Open (855) 767-2424 | |||
Offers a wide array of conventional mortgages and government-backed FHA, VA and USDA loans. Home equity and refinancing options available. Shares current rates daily. Online application process. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers conventional loans and government-backed mortgages, including VA, FHA and USDA loans. Loans likely stay with Caliber instead of being sold to another company. Licensed in all 50 states, with local consultants in 43 states. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers home loans for purchase or refinance. Conventional, FHA, VA and USDA loans available. Licensed nationwide, including in Puerto Rico and the U.S. Virgin Islands. Rate and closing guarantees. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
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| Financial technology company offering up to $500,000 in home equity agreement. No interest and no monthly payments. Minimum FICO score of 500. Available in 15 states. Apply online and complete process in as little as 10 days. | ![]() | ||||
Offers conventional, FHA, VA and jumbo loans. HomeRun Mortgage features low down payment and flexible credit requirements. Rate-and-term and cash-out refinancing. Rates online. Current Citi customers may receive special pricing. | ![]() | Chat with a ConsumerAffairs decision guide Live agent |
What is a home equity loan?
A home equity loan is a secondary mortgage product that taps into your home's equity. This product is ideal for homeowners whose home values have appreciated but who don't want to refinance their existing mortgage to pull cash out of their homes.
Home equity loan funds are disbursed in a lump sum. For the duration of the loan, you'll make monthly payments according to a predetermined repayment schedule. In most cases, a home equity loan has a fixed interest rate.
How does a home equity loan work?
Home equity loans, which are second mortgages, give homeowners access to their home equity, which is the difference between the home's value and the mortgage balance. For example, if your home is worth $300,000 and you owe $220,000, you have $80,000 of equity in your home.
Depending on the lender, you may be able to access some or all of your home equity with a home equity loan. Each lender has a maximum LTV ratio that defines how much a borrower may receive. If a lender has a 90% combined LTV cap, the combined balance of their primary mortgage and home equity loan cannot exceed 90% of the home's value. For a home worth $300,000, the combined maximum is $270,000.
- Home equity loan versus HELOC
- A home equity loan and home equity line of credit (HELOC) both help a homeowner access home equity. However, they operate very differently. Here are some of the most common differences.
- Lump sum versus line of credit: While a home equity loan provides a one-time lump sum of cash, a HELOC provides a defined credit limit. A homeowner can borrow and repay their HELOC numerous times throughout the draw period (typically five to 10 years).
- Monthly payment amount: A home equity loan has a fixed payment amount that is a combination of principal and interest. HELOCs have interest-only payments during the draw period. Once the repayment period starts, you make principal and interest payments (often over 20 years).
- Interest rate: Most home equity loans lock in a fixed interest rate. HELOCs usually have a variable interest rate that can go up or down over time. In both cases, the borrower's credit profile and chosen lender can affect the rate.
- Interest charges: With a home equity loan, borrowers start accruing interest on the full balance immediately, whether they're using the money or not. With a HELOC, you only pay interest on the money you draw from your credit limit. If you have a zero balance, there are no interest charges.
- Maximum LTV ratio: Some lenders have different maximum LTV ratios for home equity loans versus HELOCs. This difference could affect how much of your equity you can access.
Home equity loan requirements
To get approved for a home equity loan, you must meet certain requirements.
- Credit score: Lenders may require that borrowers have a minimum credit score to qualify for a home equity loan.
- Ability to repay: Lenders review income and debt obligations to determine if you can reasonably add the loan payment to your monthly expenses. The lower your debt-to-income (DTI) ratio is, the higher your chances of approval.
- Combined LTV ratio: The combined balance of your primary mortgage and your home equity loan cannot exceed a certain percentage of your home's value. Most lenders allow a max combined LTV ratio of 80% to 90%.
Additionally, your lender may charge fees for your loan. Some lenders may waive these fees, so keep that in mind when you're comparing loan options. Some of the most common fees that lenders charge include the following:
- Application fee
- Origination fee
- Credit report fee
- Home appraisal fee
- Document fee
- Title search
Some lenders offer discounts on your interest rate if you set up automatic monthly payments. Additionally, lenders may offer relationship-based pricing to lower your interest rate or fees.
How to get a home equity loan
Compare the best home equity loan lenders to find loan options with the most attractive rates and terms. Once you've found your lender, apply for your loan in person, over the phone or online. Application details vary by lender, but in general, lenders request your personal information, property address and details, how much you want to borrow and your desired repayment term.
Next, the loan officer will request documentation to support your application. These documents may include your most recent paycheck stubs, tax returns, property tax bills, insurance policy, and (if applicable) homeowners association statements.
Depending on your home's value, your equity and the loan amount, the lender may require an appraisal, which is performed by an independent appraiser and determines your home's value based on its features and recent sales of comparable homes in your local area. Homeowners can get an early estimate of their home's value through websites or apps like Zillow and Redfin or by speaking with a local real estate agent.
Once the lender completes its underwriting process, it will make a decision on your application. If approved, you'll receive a lump-sum distribution to your bank account or in a cashier's check. You'll start receiving monthly statements with loan details, including your minimum monthly payment and due date.
Alternatives to home equity loans
While a home equity loan is a good choice for many homeowners, it isn't the best fit for everyone. If a homeowner wants to use their equity, they can also take out a HELOC, a cash-out refinance loan or a reverse mortgage (if they’re older). Plus, there are other options available that don’t use your home as collateral.
- HELOC. A home equity line of credit is a line of credit that homeowners can use repeatedly. You'll receive a maximum credit limit based on your home's value, the maximum LTV ratio, your loan request and other factors. You can withdraw funds up to your credit limit and as you pay down the balance, you can make additional withdrawals — similar to using a credit card. Monthly payments for HELOCs are interest-only during the draw period, which is often five to 10 years.
- Cash-out refinance. Instead of adding a second mortgage, many borrowers refinance their existing mortgage and pull cash out. While this increases the balance you owe on your primary mortgage, you may be able to lower your interest rate, saving you money in the long run. Depending on the loan amount and your income, you can also adjust the term of the loan to meet your needs.
- Reverse mortgage. A reverse mortgage is a loan product for older homeowners who want to withdraw cash from their home but don't want a monthly payment. To qualify for a reverse mortgage, homeowners typically have to be at least 62 years old and have significant equity in their homes. While there are no monthly payments, interest continues to accrue, and the lender must be repaid once the homeowner moves out of the home or dies.
- 0% APR credit card offers. For a smaller loan amount, a credit card with a 0% introductory APR may be a good choice. It is an unsecured line of credit, so your home is not at risk. And some of the best 0% APR credit cards offer no-interest financing for almost two years. However, if you do not pay off the balance before the introductory period expires, the unpaid balance reverts to the standard interest rate, which is typically much higher than a mortgage rate.
FAQ
What is equity in a home?
The equity you have in your home is the difference between the home's value and the mortgage balance you owe.
How do you get a home equity loan?
Apply for a home equity loan through a bank, credit union or other mortgage lender. In most cases, you can apply online, over the phone or by walking into a branch.
What can I use a home equity loan for?
There are few limits on what you can use a home equity loan for. Many homeowners use home equity loans to make home repairs or improvements, consolidate high-interest debt, pay for college, buy a second home or invest in stocks or rental properties.
How does a home equity loan affect your credit score?
When you apply for a home equity loan, your credit score may be impacted in several ways. The credit inquiry and new account may lower your score temporarily, but your score may improve with on-time payments and your credit mix of accounts.
Is a home equity loan worth it?
A home equity loan can be a worthwhile choice if you have enough equity in your home and can afford to make your payments. Keep in mind that your home is at risk if you default on the loan.
Methodology
To make our choices for the top home equity loan lenders, we collected 13 individual data points from 15 mortgage lenders, including over 8,000 customer reviews and overall ratings from ConsumerAffairs readers submitted between 2020 and 2022. We then used this data to examine the factors that have the most impact on borrowers.
- Minimum credit score: We considered this for all lenders, but most required a 620 minimum score. However, there are several lenders that will work with borrowers who have less-than-stellar credit.
- LTV ratio: We gave higher consideration to lenders that allow a higher LTV ratio (most common is 80%).
- APR: We looked for lenders that have starting APRs below 10%. However, market conditions fluctuate rapidly, so we placed less emphasis on this factor when making our choices.
- Repayment terms: We examined payment term ranges and noted which lenders offer longer repayment terms of 360 months.
- Time to funding: We reviewed how quickly borrowers could receive their funds and gave greater consideration to lenders with funding times of less than 30 days.
- Closing costs and other fees: We considered lenders that have closing costs ranging from 2% to 5%, available rate discounts and low origination fees.
All of our top picks offer comparable starting APRs, work with borrowers who have fair credit, allow an 80% LTV ratio and have funding times of less than eight weeks, along with long repayment terms. They also have other features, such as online applications, nationwide availability and high maximum loan amounts.
Because customer feedback is a critical indicator when evaluating companies, it was an important factor as we selected our top picks. However, for those companies on our list with no ratings from ConsumerAffairs reviewers, there were other variables that made them stand out as good options for home equity loans, and those factored into our decisions.
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Compare Top Home Equity Loan Reviews | ||||||
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Online and in-store loan services. Offers fixed-rate, adjustable-rate and jumbo loans. Pre-qualification and preapproval services available. Refinancing and home equity lines of credit available. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
National mortgage lender with branches in 28 states and Washington, D.C. Offers conventional and government-backed purchase and refinance loans. HELOC allows you to lock in fixed rate during draw period. Check rates online. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers conventional and government-backed products in all states except Alaska, Arizona and Hawaii. Publishes purchase and refinance rates online. Get preapproved and apply online. Local loan officers in select states. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Mortgage provider with fixed-rate and variable-rate mortgage and refinancing loan options in the South and Midwest. Online application. Doesn’t post info about rates and fees. Owns and sells properties. Buyer reward program. | Chat with a ConsumerAffairs decision guide Live agent | |||||
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| Loan servicer. Processes payments, manages escrow and provides customer service. Assists with purchasing and refinancing. Offers a complimentary mortgage review. Support is available Monday through Friday. | ![]() | ||||
Online marketplace for secured and unsecured loans. Free to compare rates and quotes from lenders for mortgages, car loans, personal loans and more. Minimum credit score requirements vary. Available nationwide. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Not-for-profit credit union serving military, veterans and their families. Offers savings and checking accounts, credit cards and loans. Low fees. Competitive interest rates. Large ATM network across the U.S. and Canada. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers conventional, FHA, USDA, VA and jumbo loan programs for home purchases, refinancing options, home equity loans and HELOCs. Available in 30 states, with physical presence in 11. Loan specialist assists at each step. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers home equity and mortgage refinance loans. Fixed APRs start at 5.99% for first liens and 6.99% for second liens at time of publishing. No cash due at closing. Apply online or over the phone. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers conventional and VA loans to members. Membership limited to people with military experience or those close to them (or existing members). Provides home equity loans and HELOCs. No PMI. Rate-lock program. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers home purchase, refinance and HELOC loans in 34 states. Dedicated loan advisor helps you at each step of the process. Processes loans in-house in two to three weeks. VA loans available. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers home purchase loans and refinancing. Conventional fixed-rate and adjustable-rate loans. Government-backed loans, including FHA, VA and USDA. New construction and home equity loans. Posts sample rates online. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
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| Offers home equity line of credit for debt consolidation. Up to $150,000 line of credit with fixed interest rate. Five-year draw period. 10- or 15-year term. Simple application process. No prepayment penalty. | ![]() | ||||
Offers home purchase loans, refinancing, home equity loans and HELOCs. Conventional loans and government-backed loans, including FHA, VA and USDA loans. New-construction loans. Loan officers in 11 states. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Offers home purchase loans, refinancing, home equity loans and HELOCs. Conventional fixed-rate and adjustable-rate loans, including jumbo loans. Government-backed loans, including VA and FHA. Zero-down options. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Conforming conventional fixed- and adjustable-rate purchase loans. Jumbo loans available. Refinance loans, home equity loans and HELOCs. Pre-qualification available. Fast-track program helps qualified borrowers close in 25 days. | ![]() | Chat with a ConsumerAffairs decision guide Live agent | ||||
Online mortgage lender. Serves all states except New York and Hawaii. Allows buyers to be all-cash buyers during the purchase process of single-family homes. Offers home loans and refinancing through New American Funding. | ![]() | Chat with a ConsumerAffairs decision guide Live agent |
- Guide sources
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page. Specific sources for this article include:
- Federal Trade Commission, “Home Equity Loans and Home Equity Lines of Credit.” Accessed Aug. 31, 2022.
- Consumer Financial Protection Bureau, “What is a home equity loan?” Accessed Aug. 31, 2022.
- Consumer Financial Protection Bureau, “What is a second mortgage or junior lien?” Accessed Aug. 31, 2022.
- Consumer Financial Protection Bureau, “What is a piggyback second mortgage?” Accessed Aug. 31, 2022.
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