How to handle credit inquiries
Frequently Asked Questions
Straight answers to the questions we hear most.
A Home Equity Loan provides a single, lump-sum payment upfront, which you repay with a fixed interest rate and consistent monthly payments. A HELOC works more like a credit card, giving you a revolving line of credit to draw from as needed during a “draw period,“ typically with a variable interest rate. You only pay interest on the amount you’ve actually borrowed.
Yes, several alternatives exist, including:
Personal Loan for Debt Consolidation: An unsecured loan that doesn’t put your home at risk.
Credit Card Balance Transfer: Moving balances to a card with a 0% introductory APR can save on interest if you can pay it off within the promotional period.
Debt Management Plan (DMP): Working with a non-profit credit counseling agency to negotiate lower interest rates with your creditors.
Personal Loan for Debt Consolidation: An unsecured loan that doesn’t put your home at risk.
Credit Card Balance Transfer: Moving balances to a card with a 0% introductory APR can save on interest if you can pay it off within the promotional period.
Debt Management Plan (DMP): Working with a non-profit credit counseling agency to negotiate lower interest rates with your creditors.
The loan term (e.g., 15, 20, or 30 years) directly impacts the APR. Because fees are amortized over the life of the loan, a shorter-term loan (like a 15-year mortgage) will often have a higher APR than a 30-year loan with the same fees, as the costs are spread over fewer years.
Yes, when a lender calculates your back-end DTI to qualify you for a mortgage, they will include the estimated total monthly payment (PITI - Principal, Interest, Taxes, and Insurance) of the new home loan you are applying for in the “debt” side of the equation.
An amortization schedule is a table that shows the breakdown of each payment into principal and interest over the life of the loan. When you make an extra principal payment, you effectively “re-amortize” the loan, moving you ahead on the schedule and reducing the total number of future payments.
Get weekly rate updates and mortgage tips
Are you interested in learning more about mortgage brokers in your area? Tell us a bit about yourself and we'll point you in the right direction — no spam, unsubscribe anytime.