A key to finding the right loan is to consider all available sources. The emergence of home equity programs has enlarged the field of lenders. Likely lenders are among the following:
Banks.
Commercial banks are attracted to home equity lines as a way to sell other bank services, such as savings accounts and credit cards. Banks have been some of the most aggressive marketers of home equity loans, offering low closing costs, special initial interest rates, and no annual fees.
Consumer Finance Companies.
In their book “Barron’s Finance & Investment Handbook,” John Downes and Jordan Goodman stated that these finance companies also known as small loan or direct loan companies lend money to individuals under the small loan laws of the individual U.S. states”. These firms have long experience in making second mortgages on homes. They have also been aggressive home equity loan makers in an effort to keep borrowers who want to retain tax-deductible interest.
Savings and Loan Associations.
The S&Ls have moved into home equity more cautiously. However, these loans are natural extension of their first mortgage business.
Mortgage Bankers.
W. Frazier Bell in his book “How to Get Best Home loan,” explained that mortgage bankers work closely with the secondary market, using its guidelines and selling the resulting loans or securities backed by the loans. As equity loans become more acceptable to investors and other purchasers of mortgage loans, mortgage bankers can be expected to offer more programs.
Credit Unions.
These organizations should provide equity loans for the same reasons as consumer finance companies.
Securities Brokerage Firms. Stockbrokers are more than just securities salespeople. Many of the major companies offer their own line or sell programs offered by the large investment houses.
Nontraditional Lenders.
A major university provides student loans backed by home equity. Some home improvements dealers also offer equity financing for these products and services.
Online Lenders.
“These are usually mortgage brokers who operate over the internet,” says Robert Erwin, author of the book “Tips and Traps When Mortgage Hunting”. Many mortgage banking companies have an Internet presence, as well as their bricks-and -mortar offices, while others operate through Web sites only. Though the latter are not chartered banks, they do have to comply with all federal lending laws.
With home loans, you often do not have to search out sources. If you own a home and have a good credit rating, the lenders will seek you out.
