Lower: 2020 Home Equity Review

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Founded in December 2018 and headquartered in New Albany, Ohio, Lower offers mortgages, refinance loans and home equity lines of credit (HELOCs).

Lower, which is named for its lower loan rates, uses artificial intelligence (AI) to analyze thousands of closed loans and peer data points to make sure you get the best possible loan terms. The lender offers quick approval and closing, as well as competitive APRs and minimal fees.

Lower snapshot

Loan types offered HELOC
APR range 5.75% to 18%
Loan amount range $15,000 to $350,000
Minimum credit score required Not specified
Repayment terms 10 years
Average time to approval Same day

Benefits

Lower offers a few distinct benefits, including:

  • Good interest rates: As of June 2020, the average HELOC rate is 5.23 percent. With Lower, rates start as low as 5.75 percent APR, falling in line with the national average.
  • Minimal fees: The only fee that Lower charges aside from title-related expenses is a 1 percent origination fee. However, as a Lower customer, you’ll also get all future mortgage refinance loans without any lender fees.
  • Easy application process: Lower has a conversational online application that breaks down the home equity process in a simple way for people who don’t often deal with home equity-related terms.

Drawbacks

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

  • No home equity loan: If you would prefer a fixed-rate home equity loan over a revolving HELOC, you’ll need to work with a different lender.
  • No autopayments: Unlike most lenders, which offer discounts for setting up autopay, Lower doesn’t advertise any autopay options.
  • Recurring origination charge: Many lenders charge an origination fee when you open your HELOC. Lower, however, charges a 1 percent fee for every draw that you make, which could add up over time.

Types of fees charged

Lower charges an origination fee of 1 percent for each HELOC transaction you make. There are no annual fees, though you may still be on the hook for other fees that aren’t typically assessed by a lender, such as title-related costs 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 future mortgage refinance loans for life.

Loan products offered

In addition to a HELOC, Lower offers home purchase and mortgage refinance loans. If you’re looking for a HELOC, though, it’s important to know the terms before you apply.

For starters, Lower offers loans of $15,000 to $350,000, with the maximum amount varying based on your state and your loan-to-value ratio — Lower allows up to an LTV of 95 percent, which is far more than most HELOC lenders.

Lower doesn’t provide specifics for its draw and repayment periods, but it does advertise a 10-year loan term.

How to qualify for a home equity loan with Lower

You will likely need a good credit score and a debt-to-income ratio less than 50 percent in order to be approved for a loan. Current Lower customers have credit scores of 680 and above, 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

Lower’s application process can be completed entirely online. You’ll start by sharing 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 agree 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. ET and Fridays from 9 a.m. to 4 p.m. ET.

How Bankrate rates Lower

Overall Score 4.1
Availability 3.8
Affordability 4.3
Customer Experience 4.1

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.