Before committing to your current mortgage lender for a home equity line of credit, consider exploring other options to ensure you’re finding the best HELOC lenders.

With so many HELOC lenders available, finding a high-quality, low-cost option should top your list of priorities. In addition to comparing interest rates, you should also evaluate each lender’s HELOC closing costs. Those typically include fees related to the approval process, like a title search and an appraisal. Some banks do not charge closing costs or will waive certain fees as part of a special promotion. Some will include closing costs in the loan balance, so you don’t have to pay them out of pocket.

HELOC lenders compete for your business — make them earn it. Look for banking institutions that offer convenient features, such as an informative website and a straightforward online application, as well as access to a dedicated banker who will guide you through the HELOC process.

Equity requirements vary among lenders and are often not something you can control, which makes shopping around for the best HELOC option essential. In many cases, banks require an excellent credit history and a debt-to-income ratio of 43% to 50% to approve a HELOC application.

What aspects of a HELOC should I compare?

The search for the best HELOC lenders starts by identifying reputable financial institutions. Narrow your list to the lenders who best fit your financial needs, comparing interest rates, fees, discounts and loan limit ranges. Also research the different kinds of HELOCs available on the market, such as hybrid, convertible and flat-rate HELOC options.

The range of banking fees charged for a HELOC are similar to those with a mortgage, including fees for your application and the closing process. Not all lenders charge the same fees, so you’ll want to carefully review terms.

First Merchants Bank does not charge customers any closing costs when opening a home equity line of credit.

What you should know before applying for a HELOC.

• If you begin your HELOC application online, you may still need to speak to a loan officer over the phone or at a local branch.
• Likely, you’ll be expected to submit proof of income and paperwork that confirms the outstanding balance on your mortgage.
• Prove ownership by presenting the title to your home. This also confirms whether the property has any liens or claims against it.
• When you close on your HELOC, be prepared to sign documents and pay any associated closing costs, if necessary.

Three things to consider before finding a HELOC lender.

1. The first aspect a borrower should evaluate is a lender’s interest rates. While most HELOCs come with an adjustable rate that can change over the course of repayment, some offer rate-lock options to protect against future increases.
2. Most lenders allow you to borrow against your equity for any legitimate purpose, other than for business or illegal activity.
3. You aren’t required to disclose to HELOC lenders how you’ll use the money. However, in some cases it helps to offer that information, so you can get professional guidance on the best loan options for your situation and goals.

If you’re a homeowner in need of convenient access to cash, we can help you determine which loan option may fit your needs. Call 1.800.205.3464 or find a banking center near you where you can speak with a home equity expert.