• Compare both APR and additional fees across multiple lenders. The APR for home equity loans or lines of credit does not include the total fees associated with the loan, like closing costs.
• Most home equity loans have a variable rate, based on a publicly available index, like the prime rate or the U.S. Treasury Bill rate. If the rate is linked to an index, find out which index, and check what their margin is. Companies may have a limit on how much the interest rate can fluctuate over a certain period of time.
• Be cautious of discounted introductory rates – they can fluctuate, unless it is stated that the rate is fixed. A lender may draw you in with a great starting rate, which can then rise to a rate far greater than what you agreed to.