PROS / You can use your second home or investment property as collateral.
CONS / You may have to pay closing fees.
VERDICT / Key Bank offers more leeway in its home equity loans and lines of credit than many of the lenders we reviewed. However, you may pay for the greater flexibility in higher interest and fees.
Key Bank offers both home equity loans and home equity lines of credit (HELOC). It has a wider range of terms and conditions than many of the other lenders we reviewed, including allowing you to use a second home or investment property as collateral. However, it may charge closing fees, something most home equity lenders cover themselves.
Key Bank has lending programs to suit different needs, such as high LTV loans. An LTV, or loan-to-value ratio, looks at the amount you still owe on your home divided by the value of the home itself. While most banks only loan up to a fixed loan-to-value ratio, Key Bank has a wider acceptable range. You can discuss this with your loan officer. It can also work with people whose credit scores are lower than those preferred by other institutions. Finally, it allows you to use real estate you own but do not occupy, such as a vacation home or investment property, as collateral. However, it may charge higher interest and some extra fees for these special cases.
You can find the current terms and rates on Key Bank’s website. However, keep in mind that these are just examples. What you qualify for may differ, as it depends on your credit history, income and other factors.
Some of the home equity lenders we reviewed would not disclose average or maximum times it takes to get a loan. Key Bank is one of those, although the agent we spoke to said some customers can close in as little as three weeks. This is on par with the minimums of other lenders. You can access your money immediately after the three-day right of rescission period. These three days are mandated by law to allow you to cancel the loan if you have buyer's remorse. You can have the funds transferred to your checking account or use checks. With a HELOC, you may be able to use a special KeyEquity Gold MasterCard. This option is not available in all states, however.
We found that customer service was better when working directly with a branch than through the national line. Branch loan officers were more willing to take time to answer questions (as opposed to directing us back to the website). Also, if you'd like to have a single point of contact throughout the application process, you need to work with a local branch. Key Bank has over 1,000 branches across 13 states.
If your needs are outside the norm, such as if you need more money than your loan-to-value ratio allows, if your credit is low or you'd like to use your second home as equity, Key Bank is worth looking into. It has some higher initial fees than many institutions, but it exercises more leeway in what it can offer in a home equity loan or HELOC.