Home equity lender review methodology
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To determine a home equity lender’s Bankrate Score, Bankrate rates lenders on a scale of one to five stars — with five the highest rating — based on a variety of factors relating to the lender’s products and services. To assign our ratings, we assessed each mortgage lender across three core areas: affordability, availability and borrower experience. Within these areas, we evaluate for:
Affordability - 33.33%
- APR (Annual percentage rate) - 80%: Accounts for lowest advertised APR (annual percentage rate), based on a borrower with a credit score of 700 or higher and a combined loan-to-value (CLTV) ratio of 80 percent obtaining a 30-year, home equity line of credit (HELOC) or home equity loan for $30,000
- Introductory APR - 20%: Accounts for introductory rate offer
Why we consider this: For the average borrower, a HELOC or home equity loan represents not only a big commitment financially, but also a considerable portion of their budget month to month. We assess for affordability to help you choose a home equity lender that offers the lowest interest rates.
Availability - 33.33%
- Licensing - 50%: Accounts for scope of availability based on the Nationwide Mortgage Licensing System and Registry
- Credit score - 20%: Accounts for lowest credit score requirement on either a 30-year HELOC or home equity loan
- Loan minimum - 10%: Accounts for lowest loan minimum on either a 30-year HELOC or home equity loan, ranging from $10,000 or less to $35,001 or more
- Draw requirement - 10%: Accounts for minimum draw requirement on HELOCs
- Loan products - 10%: Accounts for ability to borrow either a HELOC or home equity loan, or both
Why we consider this: While many home equity lenders work with borrowers nationwide, some only operate in certain regions or states. Some lenders, too, have a higher credit score minimum or fewer loan options, or minimum draw amounts. We assess for availability to help you choose a home equity lender that operates in your area and can connect you with the right type of loan based on your needs and qualifying criteria.
Borrower experience - 33.33%
- Rate transparency - 45%: Accounts for ability to compare current HELOC or home equity loan rates via the lender’s website
- Convenience - 35%: Accounts for ability to apply for a HELOC or home equity loan online; log into an app, dashboard or portal to check loan status; and/or close with e-closing or remote notarization
- Customer service - 10%: Accounts for ability to contact the lender for support, including via a branch location, online (email, chat or lead form), phone or text
- Fixed-rate options - 10%: Accounts for ability to lock all or a portion of HELOC balance
Why we consider this: When you shop around for a HELOC or home equity loan, often the first impression comes through the home equity lender’s website or app. Once you apply, you’ll want a lender who’s flexible and communicates with you every step of the way. We assess for borrower experience to help you choose a home equity lender that makes it simple to compare costs, get in touch when you have questions and deliver what you need on time.
How we collected this information
Bankrate’s Home Lending editorial team comprises five experts who’ve reviewed more than 30 home equity lenders. We gather lender information through direct contact with lenders, Home Mortgage Disclosure Act (HMDA) data, regulatory filings and assessments by reputable third parties. We confirm the accuracy of data at the time of review.
Our editorial team typically conducts a comprehensive review of each home equity lender at least once a year, but some lenders may be updated on a quarterly or biannual basis.
How these ratings impact our reviews
The Bankrate Score is our editorial team’s rating based on the above factors. We rate home equity lenders on a scale of one (1) to five (5) stars, with five the most favorable. The Bankrate Score does not take into account customer reviews, which are also displayed on each lender’s review as a separate star rating.
Bankrate’s partners compensate us, but our opinions are our own, and partner relationships do not influence our reviews.