When shopping for the best rate on a home equity loan what are the key questions to ask the potential lender?

Well first of all interest rates aren't everything. Most banks will give you relationship discounts. This means if you have tons of things with the bank already they will give you a small interest rate discount. In addition, if you keep a large amount of money deposited or owed with one bank they will usually grant you special priveledges (usually combined amount of $25,000). So check with your current bank first to see what they will do for you (I know Wells Fargo has huge benefits for people who keep many things with them).

Look for applications fees. You should not have to pay any application fees up front. This include appraisal fees and trust fees, usually the bank will pay for these.

Look at the early closing fees, if any. If you are planning to stay in the house for more than 3 years there is usually no fee.

Of course interest rates are good ways to compare loans, but check these other things too.