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SoFi Review

Wednesday, May 18th

2022 Home Equity Loan Reviews

SoFi Review 3.5 Star Rating

SoFi

3.5 Star Rating

SoFi stands for "social finance", illustrating this company's approach to lending, different from traditional lenders like banks. Treating their clients as "members", this company aims to help both investors and borrowers to reach their financial goals.

Spring HQ Is The Real Lender

You don't really need to know very much about this company as a source of home equity loans. Why? SoFi passes all of those inquiries along to Spring HQ, which bills itself as "one of the nation's largest non-bank home equity lenders". That's a positive for SoFi: where they only have an "A" rating and no accreditation with the Better Business Bureau, Spring HQ has an "A+" and is also accredited there.

Solid Reputation, But A Few Complaints

Spring HQ has an overall solid reputation, but we still found some complaints. Customers said that the process dragged out over weeks, not days, and that they were still denied a loan at the end - despite meeting all of the criteria for income, loan-to-value, and so forth. Many clients had a hard time getting a response from Spring HQ representatives. Others said that they paid $250+ for a drive-by appraisal that significantly undervalued their home, compared with other reliable evaluations of the property.

Getting Started With Your Loan Application

Let's say you go ahead with the process. What can you expect? First, you'll complete their preliminary application, to prequalify you for your home equity loan. Fill out basic details like address, phone number and email, then information about the current mortgage and value. On the slider where it indicates how much you'd like to borrow, it will automatically populate to represent the minimum and maximum amounts based on a debt-to-income ratio of 43% or less. (You'll have to take out a home equity loan with a minimum of $25,000.) Finally, once you provide your birthdate (so that Spring HQ can do a "soft pull" on your credit history), you'll get a prequalification results page.

Best Home Equity Loans

Rate Transparency

We weren't blown away by our results. Despite having two columns - "Lowest Payment" and "Lowest Rate" - our offers were exactly the same: a term of 240 months, with a middling APR. While our rate was lower than some of SoFi/Spring HQ's competitors, we didn't love the fact that our only option was a 20-year term.

Schedule An Appointment

Spring HQ also comes up short compared with lenders that let you complete the entire process online: after getting your results page, you have no other option than to schedule an appointment to speak with a representative. That takes away a lot of the convenience offered by 100% online providers of home equity loans.

Wait For Your Money

Another drawback? Your home equity loan could take a little longer here to reach your account: your cash might not be deposited for two weeks or more. In fact, while their website said loans are funded as quickly as 14 days, the intro email we received from Spring HQ said we should expect it to take at least three weeks for funds to be deposited.

Good Rates, But Inconvenient And Fewer Options

In short, we can't say much about SoFi with respect to home equity loans, since they don't have any part of the process beyond funneling your inquiry to their partner, Spring HQ. This partner lender is a decent option for a home equity loan: their rates were fairly competitive and the company has a good reputation. But, they don't measure up to comparable services that fund loans much more quickly, and you won't get the convenience of a 100% online application process.

The 5 Best Home Equity Loans

Where Can You Go to Find the Best Home Equity Loans?

With interest rates at historic lows, it's a fantastic time to borrow money: to pay off credit card debt, invest in your child's education, make home improvements, or splurge on that big-ticket item you've always wanted.

There are two ways to take out a home equity loan: as a cash-out refinance of your current mortgage or as a standalone second loan. Depending on your circumstances - how much equity you have in your home, the terms of your current mortgage, credit score, and so on - you may find that one approach works better than the other.

The Best Home Equity Loans Compare Home Equity Loans Compare Home Equity Loan Reviews What are the best Home Equity Loans Best Home Equity Loan Reviews

Home Equity Loan FAQ

A home equity loan is basically a second mortgage. You borrow against the amount of money you have already paid into your residence (as opposed to how much is still owed to the mortgage lender, if any). For example, if you purchased your home for $300,000 and you still owe $200,000, you have $100,000 in equity. Your loan would be based on that $100,000 you have already paid off on your home. (This also assumes that your house is still worth the $300,000 you paid at the time of purchase.)
A home equity loan usually has a fixed interest rate and monthly payment, and you get the entire amount of the loan upfront as a lump sum. A HELOC, or home equity line of credit, lets you take out money as needed up to a predetermined credit limit. However, HELOCs almost always have variable interest rates, so you could be paying more in interest depending on when you withdraw the funds.
You'll likely get lower interest rates with a home equity loan compared with a personal loan - because you're essentially taking out a loan from money you've already paid into your home. Credit card interest rates are not only extremely high, but your credit limit might also prevent you from getting as much money as you need.
Most lenders require you to have at least 15-20% equity in your home. In other words, if your home is worth $400,000, you need to owe less than $320,000 to $340,000 in order to qualify for a home equity loan. Keep in mind that these calculations are based on the current appraised value of your property, not the purchase price.
It's possible that you could face foreclosure if you don't repay your home equity loan. If you're having trouble making payments, it's a good idea to reach out to the lender and ask for a payment arrangement. Being proactive can make a huge difference and may save you from foreclosure.
That depends on the loan terms. Some home equity loans have no prepayment penalty, while others assess early termination fees: usually a percentage of the remaining balance or a certain number of months of interest. If you think there's any possibility that you'll pay off your balance before the end of the loan term, be sure to choose a lender that offers home equity loans without prepayment penalties.
This is another case of "it depends" . First, tax laws can change from year to year, impacting whether or not you can deduct the interest paid on your home equity loan. In the past, the IRS has only allowed deductions when the home equity funds are used to "buy, build, or substantially improve" the home that secured the loan. Check with your tax professional for more information.
Yes. As long as you choose a reputable lender, there's no reason you can't safely and quickly apply for your home equity loan online. It can definitely save you some time and hassle, since there's no need to go into a brick-and-mortar location to fill out paperwork.
Compare the Best Reviews

Continued from above...

Shopping around for the best rates on your home equity loan is a wise idea - don't just go to your current lender and assume they'll give you the lowest interest rate or best terms! It's worth your time to consider multiple lenders; even a difference of a few tenths of a percent can save you thousands of dollars in the long run, and some companies will reduce their fees or eliminate them completely just to earn your business.

Fortunately, the internet makes it effortless to compare your options with just a few clicks of the mouse. Many lenders provide their rates upfront, so you'll know if they're worth considering before you even begin an application; others may do a "soft pull" on your credit history, so that they can offer personalized rates based on your specific situation. Plus, some lending platforms give you the ability to compare offers from multiple banks with a single online form, saving you time while connecting you with the best rates on the market.

As you decide which provider to use for your home equity loan, there are several factors that can guide your choice:

  • Transparency. How easy is it to see the current interest rates for home equity loans? Does the company disclose all of the fees involved with applying for a loan? Can you access this information without a soft credit check?
  • Ease of Use. Do you have to jump through a lot of hoops to get rates tailored to your needs and credit history? How complicated is the application? Can you complete the entire process online, or will you have to speak with a representative?
  • Reputation. What do other clients have to say about their experience with the lender? Does the company have a favorable rating with the Better Business Bureau?

TopConsumerReviews.com has reviewed and ranked the top options for home equity loans available today. We hope this information helps you get the money you need to pay down debt, start your home improvement project, or invest in a new business - the possibilities are limitless!

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