http://www.homemortgageloantime.com/home-equity/home-equity-loan-rates.html Home equity loan rates will play a major role in your decision to borrow. Make sure your home equity loan rates are manageable on top of your initial mortgage ( but don't worry too much). en-us Sat, 26 Jul 2008 15:00:00 EDT Sat, 26 Jul 2008 15:00:00 EDT Weblog Editor 2.0 home equity loan rates will be greater than the rates you pay on your initial mortgage - thats just the way it goes, your lender is gonna be in second position on the lien on your home, so they expect more for their greater risk. But while a few percentage points will mean a huge difference to your first home loan, differences in home equity loan rates are ok to accept. Home equity loan rates lack the punch While you are paying relatively more for a home equity loan, you are going to end up paying less. These loans are not designed for 20 or 30 year marathons, but for 3, 5 year stints in the home equity pen. You just don;t hang onto your equity loans for that long, and since you are borrowing significantly less money than before you are taking on less expenses are rates increase. We are not advocating you lurch head first into your equity spending - but we are suggesting you concentrate on matters besides finding the lowest possible home equity loan rates. More to rates that meets the eye Lets say you apply for $20,000 in equity and receive two offers: The first offer allows you your $20,000 exactly with zero points and a home equity loan rate of 9.0%. The second offer requires you access at least $30,000 - zero points again, but this time you are only paying 8.0% - significantly lower. Now, the first impulse is to let it ride and apply for for money at a lower rate - but remember, you don't need that much, you only need $20k. If each of these loans lasted 5 years, you'd pay about $2000 in interest for the first loan each year, and $2500 for the $30,000 loan - not that big of a difference. But over all you'll spend about $13,000 more for your second option while achieving the exact same end. Home equity loan rates simply don;t play that big of a deal in your equity borrowing - loan amounts do. Borrow only what you can afford and use your equity to what you know will generate savings or greater increases in equity - don;t base you decision solely on home equity loan rates. Sat, 26 Jul 2008 15:00:00 EDT