How much money do you want to save on your home equity loan? With these three tips you could potentially save thousands with a home equity line of credit, also called a HELOC.1. Shop For Lower Upfront CostsA HELOC loan’s closing costs typically are 80% to 50% cheaper than a standard loan. But it’s still important to compare multiple lenders to find the best price on a home equity line of credit.The APR does not include points or closing costs as with a standard loan. A HELOC’s APR is just the quoted interest rate for that loan. So ask potential lenders what are their fees and closing costs besides the quoted rate.2. Consider Convertible Loans For Large AmountsAll HELOC are adjustable rate mortgages. But some loans have the option to convert to a fixed-rate after a period. This can save you money on refinance, which is especially useful if you plan to borrow a large amount.3. Borrow Only When You Need ItInterest is calculated daily for HELOC loans. So if you can put off borrowing money for a few days or months, you save yourself money. For instance, on a 6.5% HELOC, borrowing $1000 will cost $5.41 in monthly interest. Borrowing $20,000 at the same rate costs $108.33 per month.When you first secure your equity loan, most lenders will offer to transfer funds immediately into your checking account. They want you to make the make the maximum interest payment. Instead, use checks or a special credit card to access funds as you need them.Take your time researching home equity lines of credit to make sure you are getting the best deal. Read the loan contract for hidden fees. And remember that most HELOC loans also qualify for tax deductable interest, another way to save money.
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