LendingTree: HELOC Review 2020
LendingTree HELOCs
As the country’s largest online loan marketplace, LendingTree is a one-stop-shop for customers who wish to purchase a home equity line of credit (HELOC).
Pros
Compare multiple lenders at once. LendingTree saves the borrower time by presenting a simplified process in which they only fill out one application but can receive offers from up to five different lenders. This can be particularly helpful for borrowers looking to tap into their home equity with a HELOC.
Find HELOCs more easily. Not every lender offers HELOCs. Many non-bank lenders don’t offer them because it makes little financial sense for them. HELOCs can’t be sold on a secondary market like other home loans, and HELOCs are also typically for lower amounts which means lenders don’t get much return on them. By using LendingTree, borrowers can skip the burdensome task of looking for lenders that offer HELOCs, and can even use the offers received to negotiate lower rates among the lenders.
Great online resources. LendingTree’s website is also loaded with comparative guides, FAQs, and calculators that help borrowers make informed decisions. If you have any doubts about which instrument is better for tapping into your home equity, perusing LendingTree’s guides can help you determine if you’re better off with a HELOC, home equity loan, or cash-out refinance.
Cons
However, the benefits of using LendingTree’s services can come with some drawbacks.
Spam calls. One of the biggest complaints we’ve heard from LendingTree users is the potential for excessive and unwanted communication from lenders. The personal and financial information that borrowers provide LendingTree will be transmitted to at least five different lenders who will no doubt attempt to entice customers to choose their business over others. These unwanted and sometimes aggressive marketing strategies can be a turn-off, especially if one has already chosen another lender. (It should be noted that LendingTree itself does not participate in these tactics. In fact, the company offers an opt-out feature from its own communications.)
Multiple hard credit pulls. An additional concern for borrowers is the number of credit inquiries that might result from several lenders performing their own credit pulls. If done within the same 45-day period, credit agencies only consider it as one inquiry. However, lenders are not operating on the same schedule and might perform these inquiries at different times, potentially causing your credit score to tumble.
For all it’s convenience, using LendingTree can have its disadvantages. It’s up to the borrower to take these concerns into account when deciding to proceed.
LendingTree HELOC Products
When you buy a home and start paying off the mortgage, you build up home equity, that is, the amount of the home you own. Second mortgages, such as home equity loans and HELOCs, allow you to access that equity to use for whatever you may need.
HELOCs are revolving lines of credit from which you can withdraw funds during designated draw periods and pay the amount back before specific dates. Usual reasons for withdrawing funds might be to cover emergency expenses, pay down higher-interest debt, purchase additional property, or for home improvement projects. In fact, the interest on HELOCs could be tax-deductible for this last reason.
LendingTree does not list its partners, and the partners that are displayed ultimately depend on several factors including your location and the personal information you input. So unless an application is completed, we can’t say within any degree of certainty which rates you are going to be offered.
However, current APRs (as of October 2020) for HELOCs depend on the amount of the loan:
- For $25,000 loans, APRs as low as 5.14%
- For $50,000, APRs as low as 3.45%
- For $100,00, APRs as low as 2.99%
| LendingTree Process |
| The application process can start on the website or mobile application |
| By answering predetermined questions and providing personal information, LendingTree will determine the type of loan that best fits your needs. |
| LendingTree shares the information provided, such as phone number, address, social security number, and financials, with up to five companies. |
| These five lenders present their offers for you to compare. |
| You can then contact any of those lenders to continue with the application process. You can also use any of the offers as leverage to negotiate with other lenders to try and get a better deal. |
| At this point, LendingTree is no longer involved in any communications or agreements between the lender and the borrower. |
LendingTree Customer Service
LendingTree does not service the loan products it offers and, as such, provides no customer service for HELOCs. Lenders are in charge of delivering customer service options directly to their customers.
Nevertheless, borrowers using LendingTree’s services can contact its customer care specialists over the phone, from Monday through Saturday, to receive assistance with the initial application process or any technical issues with its website or mobile app.
LendingTree HELOC Fees and Services
Since LendingTree does not service the HELOCs offered through its service, it does not impose any fees related to them. Additionally, LendingTree does not charge customers for the use of its platform. Any possible fees regarding the loan product you choose come directly from the lender. However, these fees are usually presented to the customer by the lender before any deal is agreed upon. It’s up to the customer to make sure they receive and understand the terms and conditions of the loan product they are purchasing.
After the customer provides the initial information and the lender’s offers are presented, LendingTree does not participate in the rest of the application process and does not determine rates, terms, or approval of the loan.
Key Facts on LendingTree HELOCs
| LendingTree will connect you with five different lenders’ offers |
| Minimum credit scores and debt-to-income ratio (DTI) qualifications will depend on the lender. |
| Having at least a 740 credit score can mean lower rates |
| Borrowing less than 80% of your home equity could drive down rates |
| Lower DTIs mean lenders are willing to offer better rates |
| Reasons to Consider a HELOC |
| Home-improvement projects |
| Immediate cash for emergencies such as medical expenses |
| Lower rates than most other types of loans |
| Possible tax deductions |
| Paying off higher-interest debt |
LendingTree: Company Overview
Headquartered in Charlotte, North Carolina, LendingTree began as Credit Source USA in 1996, offering mortgage loans and refinance. Nowadays it is the country’s most-used online lender with a wide array of auto, business, personal, and student loans. LendingTree also offers credit cards, banking products such as checking and savings accounts, and even insurance products through its QuoteWizard subsidiary.
LendingTree HELOC FAQs
What is a HELOC?
A Home Equity Line of Credit (HELOC) works in much the same way a credit card does. You can use any amount of the approved line of credit and it will be secured by your home equity. HELOCs have a payment period in which the borrower must pay back the borrowed money.
What’s the difference between HELOCs and home equity loans?
Although both types of loan products use your home equity as a guarantee, the main difference between a HELOC and home equity loan is the way the funds are disbursed. While a HELOC is a line of credit from which you can borrow at different times for different amounts, home equity loans pay a one-time lump sum.
Is a HELOC right for me?
It will depend on your current financial needs. Tapping into home equity can be a risky venture, since you’re putting your house up as collateral. This means that defaulting on these loans can lead to foreclosure and loss of your home.
Nevertheless, HELOCs have the advantage of (usually) offering lower interest rates than credit cards or personal loans. They might also offer tax breaks if used for certain purposes, such as home improvements.
LendingTree HELOC: Summary and Key Takeaways
- Largest online loan marketplace offering multiple loan products that tap into your home equity, including HELOCs
- Get up to five different HELOC offers by completing just one application, particularly helpful since smaller lenders usually don’t offer HELOCs
- LendingTree also offers home equity loans, cash-out-refinance, and personal loans, in case a HELOC is not the best fit for you
- By providing contact information, the customer opens themselves to unwanted sales pitches and marketing from lenders
- Using the marketplace does not guarantee finding the lowest market rates for HELOCs
