We have the Best Home Equity Line of Credit Rates in the Market
BBVA Compass Home Equity Line of Credit Review
Compass bank is a solid choice to look into for your home equity loan or home equity line of credit (HELOC). They have some of the best rates that we could find, but do not have the same level of customer service or educational materials that many other lenders we reviewed offer.
What We Learned
Compass bank is one of the few banks that offer interest rates below the prime rate.
Limited information available on website means that customers may be frustrated.
Compass bank offers great interest rates on home equity loans and home equity lines of credit. However, these rates are only available to very well-qualified customers, so there’s a good chance that you won’t meet the requirements. Their rates are capped at 18% though, so they will always be competitive with other lenders even if their rate isn’t actually the best.
Rates and Fees
Compass has some of the best rates, offering loans and lines of credit at .1 below prime. This is a huge difference compared to other lenders, even those who peg their rates to the prime rate. Other lenders are typically prime plus, where their rate is the prime rate plus an additional amount to ensure the bank’s profit and protect it from risk. However, many lenders are willing to waive or pay closing costs in order to get your business, and Compass doesn’t do that, so you should carefully evaluate the terms of your offer to make sure that you fully understand the terms you are committing to. Compass also charges an annual fee of $75 everywhere except Texas, which can add to the overall cost of the loan or line of credit over a long repayment period.
While their general eligibility guidelines aren’t publicly available, individuals who are looking to qualify for the best rate that Compass can offer must have a credit score of at least 720, which would put them in the top 5% of borrowers. Moreover, you must agree to take a certain amount of advances, which makes their HELOC much closer to a standard home equity loan.
The combined loan to value requirements for Compass cannot exceed 85% of the home’s value, which means that you may find yourself getting less money or having access to less credit than you would with other lenders. Additionally, by requiring that HELOC customers withdraw certain amounts in order to qualify for the preferential rates, Compass makes their home equity line of credit more closely resemble a home equity loan, which may dissuade customers who are looking to borrow less than the $25,000 minimum.
Customers have had mixed results dealing with Compass. The bank does not offer any kind of live chat support, and customers have complained that emails go unreturned. Moreover, there are not many physical branches that you can walk into, so you will be doing most of the process over the phone or online. While the phone support was generally reviewed well, the website is lacking in some of the information that you would expect, so it may be hard to determine if you should spend time filling out an application. Additionally, the changes in the interest rate based on how much of the credit line is being used caused some customers serious headaches.
Compass is a good place to look for your home equity loan or home equity line of credit if you have an excellent credit history and are planning on taking out more than the minimum required to get preferential rates. If you do not meet these qualifications, you may want to look elsewhere for your home equity loan or HELOC.