Home Equity Loan Rate Fluctuation
Home equity loan rates can fluctuate greatly throughout the life of the loan as most home equity loans are not fixed. Many offer very low introductory rates that can jump up after that introductory period is over; be sure to understand the periodic cap and lifetime cap, they are the limits that specify the amount the interest rate can change during one period and the entire life of the loan respectively. Home equity loan rates can vary depending on factors such as, credit score, loan amount, and loan to value.
Borrowers that do not qualify for financing at a lower rate have the option of taking the higher rate and refinancing after improving their credit score. Some borrowers use a high home equity loan rate to receive funds, which in turn pays off debt to raise credit scores. Borrower usually has 180 days after the sale to redeem property.
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