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Interest Rates

The interest rate you can get when requesting a home equity loan will always be low, but you will want to get the lowest rate possible so you can save thousands of dollars over the life of the loan. In order to do so, there are two things you need to know: What factors determine the interest rate and where to look for cheaper finance.

The Interest rate is determined by your credit score or history but it is also determined by the amount of money you request, the ratio between the loan amount and your home equity, the loan length and last, but not least, the lender itself.

Credit Score

Having a good credit score will ensure you get a lower interest rate. Delinquencies on your credit report will scare lenders away, so it is better if you avoid late payments, missed payments, etc. You might want to request a copy of your credit report before applying in order to make sure there are no mistakes that might increase the rate youll have to pay. A Bad Credit score does not imply a decline on your loan request, youll probably get approved since these loans are secured, but youll have to pay higher rates.

Loan to Equity Ratio

Higher loan amounts imply higher risk and thus, higher interests. However, a higher equity on your home will ease this factor. Thats why the ratio between the loan amount and your home equity is so important when it comes to determining the interest rate youll have to pay.

Different Lenders, Different Rates

Some lenders are more greedy than others, some lenders want to attract more clients and some lenders simply have lower costs than others. Thus, you need to shop around in order to get the best deal available. Start by searching the net for home equity loan lenders and request loan quotes from them. Dont be afraid to bargain with them a little. They are always willing to reduce the interest rate they charge a bit if they fill they are going to lose you to another lender.

Fixed or Variable Rates

Homeowners can get equity loans with fixed interest rates or with variable interest rates. Fixed interest rates remain the same over the whole life of the loan. Obviously, variable interest rates change according to market fluctuations. Since with variable rate loans the borrower is assuming the risk of market conditions, the rate tends to be lower and thus its a good choice for those willing to save as much money as possible. However, if the market situation worsens, youll end up paying more interests. That being said, the decision is really up to you.

Sarah Dinkins is an Expert Loan Consultant at Badcreditfinancialexperts.com that helps people to repair their credit and get approved for home loans, unsecured personal loans, student loans, consolidation loans, car loans and other types of loans and financial products. At http://www.badcreditfinancialexperts.com/article/ she is continually adding new finance articles useful for those in need of professional advice.

If you are refinancing your mortgage there are a number of fees and penalties you want to avoid paying. Many homeowners focus only on finding the best interest rate when refinancing their mortgage loans. These homeowners often overpay for everything else on their loans and take out mortgages with prepayment penalties. Here are several tips to help you avoid overpaying for your new mortgage with a prepayment penalty.

Mortgage lenders include prepayment penalties in their loan contracts to discourage borrowers from refinancing the loan. If you sell your home or refinance before the penalty expires you will be required to pay a fee. Prepayment penalties can be quite expensive; it is common for lenders to charge up to six months worth of interest on 85% of the original loan balance. If you finance your mortgage with a bad credit you can expect more stringent prepayment penalties included with your loan.

There are ways to avoid prepayment penalties, even if you have poor credit. The first thing you should check before mortgage refinancing is if your existing mortgage includes this prepayment penalty. If your current mortgage does not have a penalty or the penalty has already expired you are clear to begin mortgage refinancing. If your prepayment penalty has not expired, you can try negotiating with your current lender to see if they will discount or waive the penalty for you. If the existing mortgage lender will not negotiate you will be required to pay the penalty to refinance your loan.

When mortgage refinancing, most items on the loan contract are subject to negotiation. If you havent signed the contract and you find it contains a prepayment penalty, you should negotiate with the lender to have that penalty removed. If you have excellent credit your credit rating is a bargaining chip; threatening to find another mortgage lender will usually do trick. Another thing you could try is offer to pay an additional point in exchange for having the penalty removed. Points are a fee you pay in exchange for something from the lender. You can negotiate to pay points in exchange for a lower interest rate or more favorable terms, in this case to remove the prepayment penalty.

To learn more about mortgage refinancing while avoiding costly homeowner mistakes, register for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free mortgage refinance information guide today at: http://www.refiadvisor.com

Mortgage Refinance Information