LendingTree Home Equity Loans Review
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Need money to pay for a major kitchen remodel? Maybe you want to add a master bathroom to your second floor. Or maybe you need to pay off your credit card debt with a loan with lower interest rates. A home equity loan, which you can find through the online marketplace LendingTree, can help.
Home equity loans let you tap into the equity you’ve built in your home. You can then use one of these loans for whatever you’d like. LendingTree doesn’t originate home equity loans or any type of loan.
Instead, homeowners can search LendingTree’s online network – which you can find here – for lenders who provide home equity loans, home equity lines of credit (better known as HELOCs), and cash-out refinances.
Can LendingTree help you find the right home equity loan? Read our review of the loan marketplace to learn more.
In this article
What is a LendingTree home equity loan?
A home equity loan is a second mortgage on your home. When you close on one of these loans, you’ll receive a single payment from your lender. You can then use this money for whatever you’d like, including home renovations, paying off credit card debt, or helping to pay for a child’s college tuition.
How much you can borrow depends on the equity you’ve built in your home. Equity is the difference between what you owe on your mortgage and what your home is worth. Say you owe $200,000 on your mortgage, and your home is worth $350,000. You’d have $150,000 in equity.
Lenders typically let you borrow up to a certain percentage of the equity you’ve built, usually 80%. If you have $150,000 in equity, a lender might approve you for a home equity loan of up to $120,000.
Your home equity loan is a second mortgage. If you take one out, you’ll typically have two mortgages on your home: the primary mortgage you used to purchase your residence and your new home equity loan.
You’ll pay back your home equity loan with regular monthly payments and interest, just like you do with your primary mortgage. Home equity loans usually come with five to 30 years of repayment terms. You’ll make monthly payments until your loan ends its term, or you refinance to a new mortgage or sell your home.
As with all loan types, home equity loans aren’t free. Your lender will charge you closing costs, the fees that your lender and other third-party providers levy to close your loan. How much these fees cost will vary by lender.
How do you find a lender that originates home equity loans? LendingTree is one tool that can help.
LendingTree is not a lender. It does not originate cash-out refinances, purchase mortgages, HELOCs, or home equity loans. But it does connect you to potential lenders that originate these mortgage loan types.
You can log onto LendingTree, type in the type of loan you want – such as a home equity loan – and provide information about your income and debts. LendingTree will then pass this information to the mortgage lenders in its network. After this, you will receive several home equity loan offers from different lenders, often within several minutes of submitting your information.
You can then evaluate these offers and follow up on the ones that interest you. Remember, when you provide your information to LendingTree, you are not completing a loan application process. You only permit LendingTree to share your information with the lenders in its network.
How does a LendingTree home equity loan work?
Every lender is different, but you’ll need to meet minimum income and credit requirements to qualify for a home equity loan with one of the companies participating in LendingTree’s network of mortgage brokers and lenders.
LendingTree says you’ll need a minimum FICO credit score of 620 to qualify for a home equity loan with most lenders. The company also says your debt-to-income ratio, or DTI, must usually be no higher than 43%. This means that your total monthly recurring debts, including your new home equity loan payment, must equal no more than 43% of your gross monthly income.
According to LendingTree, its lenders are willing to approve some homeowners for home equity loans totaling as much as 85% of their available equity. If you have $100,000 in equity, LendingTree says that its participating lenders might approve you for a home equity loan of up to $85,000, or 85% of that amount.
To apply for a home equity loan with one of LendingTree’s participating lenders, first log onto the company’s home equity loan website. Here, LendingTree will ask about your property. Remember, you must own property to take out a home equity loan. You can’t be a renter.
You can select the type of home you own. Then, you’ll need to tell LendingTree how you use your home.
Select whether you want a home equity loan for your primary home, the home in which you live full time; a secondary home, one that might serve as a vacation home that you only live in part of the time; or a rental property that you rent to others all or most of the time.
Next, LendingTree will ask for your zip code. Enter it and click the “Continue” box to move to the next step.
On the next page, LendingTree will ask how you want to use your home equity loan. For example, if you want to fund the renovation of your kitchen, you’d click the “Home Improvement” icon. Alternatively, if you want to pay off credit card debt, you’d click the “Debt Consolidation” box.
Once you make your choice, LendingTree will ask you to estimate your home's value. Use the slider to enter your home’s value.
Then click the “Continue” button. Now, tell LendingTree whether you are still paying off one or more mortgages on the property. Click your choice to move on.
Next, tell LendingTree how much you still owe on your primary mortgage. After you click the green “Continue” button, LendingTree will ask how much you want to borrow with your home equity loan.
Again, use the slider to input the amount you’d like to borrow. Then click “Continue.”
After this, LendingTree will ask questions about you and your finances. The company will ask for your estimated credit score and whether you’ve served in the military.
LendingTree will also ask whether you’ve had any bankruptcy or foreclosure filings in the last seven years. You’ll then need to provide LendingTree with your name and address.
Once you provide all the information that LendingTree requests, the company will send your information to the lenders in its network. LendingTree will then send you a separate email message with each responding lender’s home equity loan offer.
Once you receive an offer, you’ll need to compare it on your own. When evaluating loan offers, you should look at the interest rate, closing costs, and APR. APR, or annual percentage rate, is an important number to study. It measures the entire cost of your loan, including the interest rate and any fees charged by the lender. No matter the interest rate, a loan with a higher APR is more expensive than one with a lower APR.
If you want to accept an offer, you must contact that lender directly. Lenders include their contact information in their offers. Once you accept an offer, you’ll work directly with that mortgage lender. You will no longer work with LendingTree.
How much does a LendingTree home equity loan cost?
LendingTree charges no fees for homeowners using its service. However, each of the lenders that respond will almost certainly charge a fee for originating a home equity loan.
These fees vary, but most lenders charge closing costs ranging from 2% to 5% of your borrowing amount. If you take out a home equity loan of $85,000, you can expect to pay from $1,700 to $4,250 in closing costs.
Why do millions of Americans trust LendingTree?
- 300+top-rated lenders
- $260Bin funded loans
- 111M Americans served
Features of a LendingTree home equity loan
A large network of lenders
LendingTree says that its network includes more than 300 lenders across the country. LendingTree will send your information to these lenders when you apply for a home equity loan.
Competing offers
After you submit your information to LendingTree, the company will send you offers from up to five lenders. You can then compare these lenders' loan rates and fees on home equity loans. You can consider other loan types: You have other options to borrow against your home’s equity. The lenders participating in LendingTree’s network also offer cash-out refinances and home equity loans or HELOCs. You can also request quotes from lenders for these alternative methods of tapping your home’s equity.
A free service … but not a free loan
You are free to submit your financial and personal information to LendingTree. However, if you decide to take out a home equity loan with one of the mortgage lenders that LendingTree suggests, you will have to pay closing costs, which will vary by lender.
You aren’t required to accept any offer
While you will receive up to five offers from lenders, you are not required to accept any. If you don’t like any of the offers you receive? You can search for a home equity loan from another source.
Pros and cons
Pros
- Submitting your information to LendingTree allows you to quickly shop for home equity loans from more than 300 lenders across the country.
- LendingTree’s service is free. You won’t have to pay anything to submit your information and receive offers from lenders.
- You can use the money from a home equity loan however you’d like. And if you use the funds for a home renovation or improvement that boosts the value of your home, you’ll be able to write off the interest that you pay on your income taxes.
- Interest rates on a home equity loan are typically lower than the rates you’d get with a personal loan or by using your credit cards.
Cons
- LendingTree does not originate home equity loans. It only connects you with lenders. If you want to close on a home equity loan, you’ll need to work with one of the lenders that makes you an offer.
- If you don’t pay your home equity loans on time, you could lose your home. A home equity loan is a second mortgage. If you stop making your payments, your lender could foreclose on your home and evict you from it.
- The interest rates on a home equity loan are usually higher than the ones that come with your primary mortgage.
- You’ll need enough equity in your home to qualify for a home equity loan. If your home’s value has fallen or you haven’t paid off enough of your primary mortgage, you might not qualify for a home equity loan.
Who should use LendingTree to search for a home equity loan?
Those with at least fair credit. LendingTree says that most of the lenders in its network require that borrowers have a minimum credit score of 620 before they approve them for a home equity loan. That is considered a fair score from FICO and is below the average FICO credit score of U.S. adults.
Those without too much debt. LendingTree says, too, that most of its participating lenders want their borrowers’ monthly recurring debts to equal no more than 43% of their gross monthly income. These monthly recurring debts include your current mortgage payment, auto loan payment, student loan payment, personal loan payment, and the minimum you must pay each month on your credit card balances. They also include your estimated new home equity loan payment.
Those with enough equity in their home. It varies by lender, but you’ll generally need at least 15% equity in your home to qualify for a home equity loan with a mortgage provider that works with LendingTree. Many lenders might require 20% equity.
Who should not use LendingTree to search for a home equity loan?
Those who don’t want two mortgages on their home. A home equity loan is a second mortgage. Once you take one out, you’ll have two mortgages on your home, which means two monthly mortgage payments. If you don’t want two mortgages, you can apply for cash-out refinancing. In this type of refinance, you refinance your current mortgage to more than what you owe and then receive the extra dollars as a single payment. If you owe $200,000 on your mortgage, you might apply for a $280,000 cash-out refinance, taking the extra $80,000 as a lump-sum payment.
Those who don’t own a home. You can’t apply for a home equity loan if you don’t own a home. That’s because these loan types require equity in a home for them to work. Renters, then, do not have access to a home equity loan.
Those with damaged credit. It varies by lender, but LendingTree says that most of the lenders in its network prefer working with borrowers with a FICO credit score of 620 or higher. If your score is lower than that, you might need to improve it first. You can do this by making all your monthly payments on time and paying down your credit card debt.
Why do millions of Americans trust LendingTree?
- 300+top-rated lenders
- $260Bin funded loans
- 111M Americans served
LendingTree vs. the competitors
Company | Services offered | Costs for a home equity loan | Requirements for a home equity loan |
LendingTree | An online marketplace that lets borrowers shop with mortgage lenders. LendingTree does not originate loans. | This varies, but LendingTree says that most lenders in its network charge from 2% to 5% of your loan amount for a home equity loan. | Most lenders in LendingTree’s network require a FICO credit score of 620 or higher and prefer a debt-to-income ratio of no more than 43%. |
Quicken Loans | This online direct lender originates its loans. To get a home equity loan, you would apply directly to Quicken Loans. | Quicken Loans typically charges 2% to 6% of your loan amount in closing costs. | Quicken Loans typically requires borrowers to have a FICO score of 680 or higher and a debt-to-income ratio of 50% or lower. |
U.S. Bank | U.S. Bank is also a national lender, meaning that you can apply directly with the bank for any type of mortgage, including a home equity loan, HELOC, or cash-out refinance. | U.S. Bank says it does not charge closing costs on home equity loans. | You’ll usually need a FICO credit score of at least 660. |
Quicken Loans Mortgage
Quicken Loans, unlike LendingTree, is a direct lender. You’d apply directly to Quicken Loans for a home equity loan. How much this type of loan will cost varies, but Quicken Loans typically charges from 2% to 6% of your home equity loan amount in closing costs.
To qualify for a home equity loan from Quicken Loans, you must meet certain requirements. These usually mean a FICO credit score of at least 680 and a debt-to-income ratio of no more than 50%.
U.S. Bank
U.S. Bank does not charge closing costs for home equity loans, which can save borrowers thousands of dollars. However, you will need a FICO credit score of at least 660 to qualify for a home equity loan from U.S. Bank. U.S. Bank will also look at your debt-to-income ratio, though it does not say how low it needs to be.
A home equity loan from U.S. Bank can allow you to borrow from $25,000 to $750,000, depending on the equity in your home.
Why do millions of Americans trust LendingTree?
- 300+top-rated lenders
- $260Bin funded loans
- 111M Americans served
The bottom line
LendingTree is a powerful tool for homeowners looking for home equity loans. It instantly connects you to more than 300 lenders and provides you with up to five offers from these lenders. It’s an easy and quick way to shop for the lender that offers the lowest interest rate and fees.
Remember that LendingTree is an online marketplace, not a lender. To close your home equity loan, you’ll have to work with one of the lenders that made you an offer or find a mortgage lender on your own.
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Writer
Dan Rafter is a freelance writer who has more than 20 years experience covering personal finance. He's written for the Chicago Tribune, Washington Post, Bankrate, CreditCards.com, Rocket Mortgage, NortonLifeLock and several others.
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