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Lower: 2022 Home Equity Review

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Founded in 2018, Lower is a direct mortgage lender that is part of Homeside Financial. Lower offers purchase mortgages, refinance loans, home equity loans and home equity lines of credit (HELOCs). It is headquartered in New Albany, Ohio.

So named for its “lower” rates, Lower is a fintech company that analyzes thousands of closed loans and other data points to recommend the best loans for individual borrowers. The lender offers quick approval and closing, as well as competitive APRs.

Lower can be a good option if you prefer an entirely online application and closing experience. It may also make sense if you have plans to take out a refinance loan in the future but don’t want to pay any fees.

Lower snapshot

Loan types offered Home equity loan, HELOC
APR range Home equity loan: starting at 2.875%
HELOC: Starting at 4.250%
Loan amount range $15,000 to $350,000
Minimum credit score required Home equity loan: 680
HELOC: 620
Repayment terms Home equity loan: 15 years
HELOC: 5-year draw period with 5-year to 20-year repayment period
Average time to approval Same day

Benefits

Lower offers a few distinct benefits, including:

  • Easy HELOC application process: Lower has an online application that breaks down the home equity process in a simple way.
  • No lender fees on future refi loans: Once you’re a Lower borrower, you won’t pay origination, underwriting, processing or administrative fees on future first-lien refinance loan.
  • High borrowing limits: Depending on your situation, you might be able to borrow up to 95% of your home’s equity with a HELOC.
  • Offers a home savings tool: If you download the Lower app, you can save for a home with the FDIC-insured HomeFund and receive a $500 match while you do so.

Drawbacks

It’s also important to consider the downsides of a lender before you apply for a home equity loan or HELOC. Here are some of Lower’s biggest drawbacks:

  • No autopay discount: Most lenders offer discounts for setting up autopay. Lower offers autopay, but not with a discount.
  • Website scarce on fee details: Lower’s website doesn’t have information about its home equity loan. Also, the site includes a long list of fees a borrower “may encounter,” but it’s unclear how much the loan might actually cost. You’d need to contact the lender to get more information.
  • Limited availability: Lower doesn’t operate in these states: Alaska, Hawaii, Maine, Montana, Nevada, New York, Rhode Island, South Dakota, Vermont and Wyoming.
  • High minimum loan amount: If you tap into your home equity through Lower, you’ll have to take out at least $15,000. This might be more than you’d like or need to borrow.
  • Must refinance your original mortgage: Lower’s home equity products require you to refinance your original mortgage first. It does not offer standalone home equity loans or HELOCs.

Types of fees charged

Lower charges an origination fee of 1 percent and a $495 application fee for home equity loans and HELOCs. There are no annual fees, though you may still be on the hook for other fees, such as title and appraisal fees.

Because these fees can vary based on your situation and where you live, be sure to speak with the lender before accepting the loan to make sure you understand what costs you’ll be responsible for.

If you get approved for a Lower HELOC, you’ll pay no lender fees on any future Lower refinance loans that are in first lien position.

Loan products offered

In addition to a fixed-rate home equity loan and a variable-rate HELOC, Lower offers mortgage purchase and mortgage refinance loans. Both of its home equity products offer loans of $15,000 to $350,000, with the maximum amount varying based on your state and your loan-to-value ratio, or LTV. Lower allows up to 95 percent LTV, which is more than most home equity lenders.

Home equity loans start at 2.875 percent APR and have 15-year terms.

HELOC rates start a 4 percent APR if you pay $400 for discount points. Otherwise, rates start at 4.25 percent APR, which comes with a $500 credit toward closing costs. Lower’s HELOC has a five-year draw period and a repayment period ranging from five years to 20 years.

How to qualify for a home equity loan with Lower

You will likely need a good credit score and a debt-to-income ratio of less than 50 percent in order to be approved for a loan. You might qualify with a credit score as low as 620, but a score of 700 or higher will get you the best rate, according to the company.

Fortunately, Lower offers prequalification, which means that you can see if you’re eligible for a loan without a hard credit check.

View home equity rates

Tap into the value you have in your home to get the funds you need.

How to get started

You’ll need to contact Lower for information on how to apply for its home equity loan. The company’s application process for HELOCs can be completed entirely online. You’ll start by providing your name, email address and phone number, after which you’ll get a call when a loan specialist gets your information.

However, if you want to continue with the application online, you have that option. The application has a conversational feel to it, making it more engaging than a typical HELOC application.

If you choose to apply online, you’ll share some basic information about yourself and your home and whether you have a co-signer.

Next, you’ll provide information about your income, assets and monthly expenses. Finally, you’ll input your Social Security number and permit Lower to do a soft credit check to get an idea of what terms you might qualify for.

The entire application process takes seven to 10 minutes, according to Lower. If you have any questions along the way, you can reach out to Lower’s customer service team at care@lower.com or via phone at 833-920-2273.

The customer service team is available Monday through Thursday from 9 a.m. to 6 p.m. EST and Friday from 9 a.m. to 4 p.m. EST.

How Bankrate rates Lower

Bankrate Score 3.7 Scoring factors
Availability 3.7 Lower offers same day approvals on minimum loan amounts of $15,000
Affordability 3.5 While Lower’s minimum APR is 4.25%, the lender does charge several fees.
Customer experience 4.0 Lower’s customer support is available Mon-Friday but no available app

Methodology

To create our Bankrate Scores, we evaluated lenders based on availability, affordability and customer experience. Availability was assessed based on the minimum loan amount required, time to approval, days to close, minimum draw requirements, minimum credit score requirements and loan types offered. Affordability was assessed based on minimum APR, discounts and promotions offered and associated fees. Customer experience was assessed based on online application and account availability, customer support, auto payment availability and mobile app availability and ratings.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.

Written by
Aylea Wilkins
Loans Editor, Former Insurance Editor
Aylea Wilkins is an editor specializing in personal and home equity loans. She has previously worked for Bankrate editing content about auto, home and life insurance. She has been editing professionally for nearly a decade in a variety of fields with a primary focus on helping people make financial and purchasing decisions with confidence by providing clear and unbiased information.