Taking Advantage of Deals on Home Equity Loans

A home equity loan allows you to borrow money by using your home equity as collateral. That may sound simple enough, but in this current competitive atmosphere of lenders vying for your business, it isn't as cut and dried as you'd think. Lenders are finessing both home equity loan rates and terms, enabling them to make offers that you can't refuse.

There's a regional bank, for example, that's giving customers the option to apply for a home equity loan while continuing to shop around. If a customer decides to get the loan somewhere else, the bank will actually give him cash to cover a portion of the closing costs if he agrees to do the loan with them. That's a long way from toasters.

The art of the deal

Some banks are using rewards programs to encourage customer loyalty. One such lender gives customers enrolled in its rewards program bonus points when they take out a new home equity loan. Another bank offers special reward points to customers when they take out a home equity loan if they also have a checking account and debit card with the bank. The points can be redeemed for rewards such as gift cards or plane tickets.

Even brokerage firms with mortgage units are getting into the act. One company is giving an extra discount on points for all current customers who apply for a new home equity loan. Until recently, the firm had only offered discounts to clients who had very high balances on deposit. Another brokerage firm is offering discounts on customers' closing costs, regardless of how much the customer has on deposit.

The result of all of these creative financing options means one thing for the consumer- there are some really good deals to be found. Even though home equity rates are higher than they've been for some time, lenders are offering a variety of ways to cut those rates in order to attract new business. A savvy consumer can shop around and find the rates and terms that are best suited for his personal financial circumstances.