If you want to utilize the equity in your home, you could consider a home equity line of credit known as a HELOC. These types of loans are quite flexible and allow the borrower to tap into an amount equal to their limit. The HELOC is very similar to a credit card as it is allows you to use it as such. However, it is a secured loan because it is attached to your home, which means, if you forfeit the loan, the lender can take your home. When you are going to apply for a HELOC, it is best to look for a lender that offers lower rates, lower fees, and good repayment terms and less documentation. Let’s look at some of these lenders.
PenFed
This lender allows the borrower to apply for combined loan to value of up to 90 percent. The lender pays the closing costs once you keep the line of credit open for three years. Otherwise, the closing costs have to be repaid, if you pay off the loan before that time period. In addition, you would not have to pay the yearly fee, if you pay up to $99 of interest payment on your loan. The lender offers a 20 year repayment period subsequent to the draw period of ten years. You can get anywhere from $25,000 up to half a million for your HELOC amount.
U.S. Bank
This lender requires a higher credit score of 730 or more for home equity lines of credit up to $100K. They use the loan to value ratio of computing your loan. No closing costs are charged. However, a 1% prepayment penalty fee is required on the initial amount up to $500 as long as you pay the HELCO in full within three years to taking out the loan. The loan amounts start from $15K to three quarter million.
Bank of America
This lender has the lowest fees. There is no closing costs, annual fee or application fee. For a home equity line, you can get up to $500K in loan amount. The repayment penalty fee is $459 in addition to other fees and taxes, if you completely pay off the loan within three years of taking out the loan.
TD Bank
If you are looking for a regional lender, the best one is TD Bank. They only offer HELOCs in 15 states; mostly on the East Coast and in addition to Washington D.C. The lender charges $50 yearly for lines of credit amounting to $50K and more. They also charge $99 for the loan origination fee. If you terminate the loan by paying it off early, there is a 2% fee.
