How do you choose which HELOC lender to apply for?

[Natalie Hahn]

How do you choose which lender to apply for a HELOC? Is it best to just go with whoever has the lowest rate? I've heard that credit unions are usually good...but does anyone have any specific recommendations?

Also, HELOCs have variable rates, but does that mean a lender can jack up rates to whatever they want? So like if I get a 3% APR from a credit union right now, that rate could end up being 7% next year if the credit union wishes it to be? Or are there limits to what they can charge?

Thanks!

[John Ludwig]

@Natalie Hahn

Some recent HELOC terms I was able to obtain at a local credit union in Wisconsin.

• (-.5%) Prime.  Current WSJ Prime is 5.5%.  Equals 5%.
• You can lock in a fixed rate on a lump sum withdrawal
• 10 year term, reviewed after 5 years
• No closing costs
• No annual maintenance fee
• Had to bring driver's license and $5 to deposit at closing

Had friends recently quoted with big banks at 7% plus.