ACCC Shares Tips On Shopping For Home Equity Loans

American Consumer Credit Counseling highlights the importance of being informed about home equity loans and how consumers can decide what is right for them

Boston, MA – June 28, 2017

Shopping for Home Equity LoansEvery day consumers are faced with crucial decisions they may not know enough about, including those related to the lending and borrowing process. An uneducated consumer shopping for a loan has the potential to make a wrong decision that has long-term effects, particularly when it comes to home equity loans.

A home equity loan is a loan or line of credit where consumers pledge their home’s equity as the collateral. Equity is the difference between how much the home is worth and how much a consumer owes on the mortgage. Consumers who enter popular markets like home equity loans can benefit from borrowing, but they should understand and weigh the benefits and risks.

National nonprofit American Consumer Credit Counseling provides consumers with the necessary information needed to shop for home equity loans.

“Home equity loans are more complex than you may think,” said Steve Trumble, President and CEO of American Consumer Credit Counseling, which is based in Newton, MA. “With so many different options, having the knowledge to identify what you need in a loan is crucial before making a decision.”

According to a survey by Omniweb commissioned by loanDepot, 57 percent of homeowners said they believe their home value has improved in the last three years, but the majority, 80 percent, underestimated the value it has gained.

Looking for a home equity loan can be daunting, but American Consumer Credit Counseling is here to provide useful tips for shopping:

  1. Ask family and friends for recommendations – Talk to people who have gone through the process already for their recommendation of lenders. Then, comparison shop. Comparing loan plans will help you get a better deal. Contact several lenders and talk with banks, credit unions, mortgage companies and mortgage brokers. Remember that brokers don’t lend money; they help arrange loans.
  2. Get information from the experts – Ask all the lenders you interview to explain the loan plans that are available. If you don’t understand any terms or conditions, ask questions. Pay close attention to fees, including the application or loan processing fee, origination or underwriting fee, lender or funding fee, appraisal fee, document preparation and recording fees, and broker fees which may be quoted as points, origination fees or interest rate add-on. If points and other fees are added to your loan amount, you’ll pay more to finance them.
  3. Ask about your credit score – Credit scoring is a system used by creditor’s to help determine whether to give you credit. It also provides helpful Information about your bill-paying history, the number and type of accounts you have, late payments, outstanding debt and the age of your accounts. It is collected from your credit application and your credit report. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points — your credit score — helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when they’re due.
  4. Read before you sign – Before you sign, read the loan closing papers carefully. If the loan isn’t what you expected, don’t sign. Either negotiate changes or walk away. You have the right to cancel the deal for any reason without penalty within three days after signing the loan papers. The lender must return any money you’ve paid to date.
  5. It’s still a mortgage – While it may be easy to forget, a home equity loan or line of credit is a type of mortgage, just like the loan you used to fund the purchase of your home. And as a mortgage, it offers certain advantages and disadvantages. You can lose your home if you don’t repay the debt. Be sure to understand where you stand to see if you will benefit from a loan.

ACCC is a 501(c)3 organization that provides free credit counseling, bankruptcy counseling, and housing counseling to consumers nationwide in need of financial literacy education and money management. For more information, contact ACCC:

  • For credit counseling, call 800-769-3571
  • For bankruptcy counseling, call 866-826-6924
  • For housing counseling, call 866-826-7180
  • Or visit us online at

About American Consumer Credit Counseling

American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling and financial education concerning debt solutions. In order to help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft,  senior living and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to or visit