Home Equity Glossary

Access card

- A machine readable card that allows you to access your HELOC account.

Affordability calculator

- One of many calculators on the Internet which estimates how much loan a person can afford to borrow.

Amortization

- The process of regular repayments at scheduled intervals to reduce the principle and repay interest as it is due.

Annual percentage rate (APR)

- The cost of a loan expressed as a yearly rate, which includes the interest rate, points, broker fees, insurance, and any other related fees a borrower is required to pay.

Annual fee

- An annual charge imposed by the lender for maintaining a loan.

Application fee

- A fee charged by the lender to cover the cost of processing a loan request and checking the borrower's credit.

Appraisal fee

- The fee an appraiser charges to assess the value of a property.

Balloon

- A final lump sum loan payment due in full after a set period of time.

Borrower(s)

- A person who borrows money from a lender.

Cap

- A limit on how much the variable interest rate can increase annually, semi-annually, or during the life of the line of credit.

Closing costs

- Fees and expenses (separate and in addition to the purchase price of the property) incurred in the process of transferring ownership of property. May also be called settlement costs.

Conversion fee

- Points or an increased rate paid for converting an adjustable rate mortgage to a fixed rate mortgage.

Credit history

- A borrower's record of repaying loans and use of revolving credit. Used by lenders to assess applicant's creditworthiness.

Credit score(s)

- A statistical method that lenders use to quickly and objectively assess the credit risk of a loan applicant.

Draw period

- The timeframe when you can withdraw money from a home equity line of credit. After the draw period expires, the repayment period generally follows.

Equity

- The current market value of a property minus any outstanding loans or liens.

Fair Isaac Corporation (FICO)

- The company that developed the FICO credit score, which is used to judge a borrower's creditworthiness.

Fixed rate loan

- A fixed interest rate loan, or installment loan, that does not change or adjust during the course of the loan.

Home equity loan (HEL)

- A fixed rate loan secured by a primary residence or second home, to the property's fair market value.

Home equity line of credit (HELOC)

- A form of revolving credit in which your home serves as collateral.

>Index

- A published cost of money measurement that lenders use to calculate the rate on a mortgage (e.g., T-bill, LIBOR, CMT.)

Internet

- A global communication network that allows computers worldwide to connect and exchange information.

Interest-only

- A non-amortized loan where interest is due at regular intervals until maturity, at which point the full principle on the loan is due.

Interest rate

- A rate that is charged for the privilege of borrowing money.

Lender(s)

- A person or company which lends money to borrowers.

Loan-to-value (LTV) ratio

- The ratio of the fair market value of the home to the value of the loan that it is securing.

Loan officer

- The person at a lending institution who solicits loans, acts as the representative for the lending institution, and represents the borrower at the lending institution.

Margin

- The difference between the interest rate and the index on a loan.

Mortgage

- A lien on real estate to secure repayment of a loan.

Mortgage payment

- The monthly payment amount owed to a lender which covers the principal and interest on a property.

Negative equity

- When the current market value of a property is less than the amount owed.

Point(s)

- An upfront fee that a lender may charge a borrower for originating a loan. One point is equal to one percent of the loan amount.

Pre-payment penalty

- A fee paid to a lender for the privilege of paying off a loan prior to maturity.

Prime Rate

- A standardized short-term borrowing rate established by the Federal Reserve Board.

Principal and interest(P&I)

- The actual loan amount and interest paid back to the lender in the form of monthly payments.

Realtor

- A member of the National Association of Realtors.

Refinance

- Paying off an existing loan with the proceeds from a new one, usually of the same size and using the same property as collateral.

Sub-prime

- A class of loans that is offered to individuals with less-than-perfect credit.

Teaser rate

- A special introductory rate on a loan or line, usually tied to a specified period of time, which is below current market rates to entice borrowers.

Transaction fee

- The amount a borrower is charged for each withdrawal on a line of credit.

Variable rate

- An interest rate that may change periodically, and is usually based on an in index and a margin that is predetermined.

Withdrawal

- The act of drawing funds from a home equity line of credit, normally using special checks or access cards.

Copyright 2009, Informa Research Services, Inc. ("Informa"). While all attempts have been made to provide effective, verifiable information in this article, neither the author nor Informa assumes any responsibility for errors, inaccuracies, or omissions. You should always seek the guidance of a licensed professional before making any major financial decisions.

Lender	APR (%)^?	Monthly Payment^?	Learn More
Third Federal Savings and Loan	Intro APR 7.240 % After Intro: 7.240 %	$0	Learn More More Info
Conditions… Variable APR of Prime minus 1.01% in all states. Min loan amount $10,000. Max loan amount $200,000. 30-year term. Annual fee waived for the first year. See conditions for guarantee at thirdfederal.com. Third Federal rate are typically 20% lower than other leaders Guaranteed Lowest Rate No closing costs, prepayment penalties, or minimum draw requirements 10 year draw period
Rate	Intro APR 7.900 % After Intro: 7.900 %	$25,000	Learn More More Info
A Guaranteed Rate HELOC is secured with your home as collateral, whereas personal loans and credit cards are not. To check the rates and terms you qualify for, we will conduct a soft credit pull that will not affect your credit score. However, if you continue and submit an application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit. Approval may be granted in five minutes but is ultimately subject to verification of income and employment, as well as verification that your property is in at least average condition with a property condition report. Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing. Guaranteed Rate Home Equity Line is an open-end product where the full loan amount (minus lender, broker, third party, and governement fees, as applicable) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw. Apply in 5 minutes, get your money in as fast as 5 days. Digital application experience. Funds directly to your bank account. No in-person appraisal needed.
Figure Home Equity Line	0.000 %	$0	Learn More More Info
The Figure Home Equity Line is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw. Fastest way to turn home equity into cash Flexible terms, redraw up to 100%, borrow $20k-$400k Approval in as little as 5 minutes. Funding in as few as 5 days. Use to consolidate debt or finance your next home project
AmeriSave Mortgage Corporation	0.000 %	$0	Learn More More Info
• Home Equity Loans & Refinance – Cash out • Customized rate quote with no impact to credit • Low Rates, Quick Approvals, Wide Range of Products • Over 100 Billion Funded. 22 Years in Business Home Equity Loans & Refinance – Cash out Customized rate quote with no impact to credit Low Rates, Quick Approvals, Wide Range of Products Over 100 Billion Funded. 22 Years in Business
District Lending	0.000 %	$0	Learn More More Info
HELOC, HELOAN or CASHOUT REFI all available. No Lender Fees Fast Easy Over 20 Years Experience
Upstart	0.000 %	$0	Learn More More Info
1. APRs for initial advances range from 8.25% to 18.00% based on funded HELOCs as of September 2024. Your actual rate will depend on many factors such as your credit history, loan-to-value ratio, line amount, loan term, lien position, and property state. The lowest rates are only available to the most qualified applicants. The APR is variable, but the APR that will apply to each draw will be fixed on the date the draw is made. 2. As of October 2024, 10% of funded HELOCs achieved a closing timeline of 6 days or less and a funding timeline of 10 days or less. This timeline assumes consumers close with our remote online notary, provide supporting documentation promptly, and ensure the information provided is accurate and consistent with our verification process. Delays, discrepancies, and other unforeseen factors may impact the closing timeline. MBA’s 2024 Home Lending Study reports an average industry closing time of 31 days. 3. A Home Equity Line of Credit has a variable rate. The APR may change, but the APR that will apply to each draw will be fixed on the date the draw is made. Your APR will be the Prime Rate at the time of draw plus a margin fixed for the life of the HELOC. As low as 8.25% APR on your initial draw* Get your money up to 5x faster than the industry standard* Fixed rate on each draw* No paperwork needed to apply

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Third Federal Savings and Loan

Intro APR
7.240 %
After Intro: 7.240 %

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More Info

Rate

Intro APR
7.900 %
After Intro: 7.900 %

$25,000

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A Guaranteed Rate HELOC is secured with your home as collateral, whereas personal loans and credit cards are not. To check the rates and terms you qualify for, we will conduct a soft credit pull that will not affect your credit score. However, if you continue and submit an application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit. Approval may be granted in five minutes but is ultimately subject to verification of income and employment, as well as verification that your property is in at least average condition with a property condition report. Five business day funding timeline assumes closing the loan with our remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing. Guaranteed Rate Home Equity Line is an open-end product where the full loan amount (minus lender, broker, third party, and governement fees, as applicable) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw.

Apply in 5 minutes, get your money in as fast as 5 days.
Digital application experience.
Funds directly to your bank account.
No in-person appraisal needed.

Figure Home Equity Line

0.000 %

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AmeriSave Mortgage Corporation

0.000 %

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District Lending

0.000 %

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Upstart

0.000 %

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Home Equity Glossary

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