PROS / The posted interest rates are some of the lowest we found.
CONS / Third Federal does not offer rate lock for its home equity lines of credit.
VERDICT / Third Federal does not offer rate locks on its home equity loans and HELOCS and only loans up to $150,000. However, it has some of the lowest rates of the lenders we reviewed, making it a bank to consider if it offers loans in your state.
Third Federal offers home equity loans and home equity lines of credit (HELOC) when you use your primary residence as collateral. The amount it can lend is about average for most home equity loan lenders and is determined by your loan-to-value ratio, which is the amount you owe on your home divided by the home's current worth.
This lender, however, stands out from other institutions in that it is more willing to work with you if your current debt is high. With good credit, it may work with borrowers whose debt-to-income ratio is more than most banks are willing to consider, although it prefers to work with clients who have lower debt to income ratios. Forty percent is average for most lenders. You can only use the home you live in as collateral, however.
Like with most home equity loans, you can take up to 30 years to pay back your loan, but check the website for this lender’s draw period for HELOCs. A draw period is the amount of time during which you can pull money against the HELOC amount. Also discuss with your loan officer the maintenance fees and minimum payments for HELOCs, as applicable.
Although this bank only has 39 branches in two states, it can provide home equity loans in OH, FL, KY, CA, PA, NJ, VA and NC. If offers HELOCs in CO, CT, DC, GA, IL, IN, KY, MA, MD, MO, NH, NJ, NY, NC, OH, OR, PA, TN, VA, and WA. Like with some of the lending institutions we reviewed, the interest rate can vary by state. It does not provide customer discounts. Nonetheless its posted interest rates were overall some of the lowest of the institutions we reviewed for both home loans and home equity. With HELOCs, the interest rate is variable but will never go above 18 percent or below 2 percent. Unlike most banks, it does not give you the option to lock the interest rate on home equity loans.
The website has the usual calculators you'll find on the websites, and its FAQs are mostly geared toward its own programs. However, we found the email process easy to use, and we got a quick reply to our questions. The online application was more involved than some of the other applications we tested. There was no coaching ahead of time to let you know what information you needed, but there are help buttons to explain each section. The loan officers we spoke to on the phone were knowledgeable and answered out questions in detail, and we were connected quickly to an agent each time we called.
Third Federal offers home equity loans and lines of credit with some of the lowest posted rates and fewest fees of the lenders we reviewed. In addition, it has good customer service with knowledgeable loan officers who can work with you to get the best loan for you. If you are in a state that Third Federal can service, it's a bank worth pricing out.