Question:

How to read a HELOC APR?

Answer:

The APR of a loan is usually a good starting point when comparing mortgage quotes, not in the case of a HELOC APR, though.

Most loans have APR based on the interest rate plus all closing costs related with the loan. A HELOC will only have APR that will include the interest rate. Since no closing costs are included in a HELOC APR, it is necessary to ask about those on your own. Even though there are many no cost HELOCs offered, often you will have significant closing costs with a HELOC and they will not be included in the APR.

If your equity drops due to depreciation, or you have been delinquent on payments, your HELOC balance may not be readjusted, or will be reduced. Also, the APR of your HELOC may change if rates go up or down. HELOC rates are adjusted more often than other loan rates, and your monthly payments will change, as well. Note that selling the house makes the HELOC due.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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