According to a recent ABC article, American homeowners took out a whopping $1.1 trillion in home equity loans during the housing boom: “For decades, owning a home has not just been a measure of achievement, it has also been a measure of net worth. When home prices were ballooning Americans took out a record $1.1 [...] [...more]
Fannie Mae (the largest national provider of home loan funds) recently issued new rules that will affect many HELOC customers. The Boston Globe reports: “Fannie Mae will no longer allow homeowners to refinance loans it either owns or has packaged into bonds at typical loan-to-value ratios in areas with falling home prices if they’re going [...] [...more]
If the property used to secure your HELOC is your primary residence, the federal Truth in Lending Act gives you 3 days from the day the line was opened to cancel (or “rescind”). Should you choose to rescind, the HELOC lender must return all fees including third party charges such as the appraisal. The line [...] [...more]
According to MarketWatch, the recent federal cuts have resulted in lower rates for HELOC customers. Financial columnist Chuck Jaffe notes that home equity lines are the one place that consumers are actually seeing a difference: “BankRate.com pegs the rate on a $30,000 home-equity line of credit at 5.52%, on average, down sharply from a week [...] [...more]
During the real estate boom, lenders would regularly set HELOC caps above the home’s current value. Now, they’re reconsidering. MSNBC reports: “Lenders periodically conduct “portfolio reviews” to examine whether the assets (in this case homes) against which they have extended credit have held their value, says Richard Hagar, an appraiser at American Home Appraisals in [...] [...more]
A HELOC can be a smart way for some homeowners to fund home improvement projects or pay for emergency expenses. On the pro side, HELOCs offer: - lower interest rates than most credit cards - high limits - low fees - tax-deductible interest But, there are some downsides to borrowing money with a HELOC. On [...] [...more]
As the real estate market is declining, so are the earnings of major HELOC lenders. Many home equity borrowers now have credit lines higher than their homes’ current value. When these customers default, the HELOC lender often has difficulty recovering any of their money. The Wall Street Journal reports: “David Hilder, a banking analyst at [...] [...more]
According to the Wall Street Journal, home equity rates have been falling steadily for the past 6 months and may fall further based on yesterday’s federal rate cuts: Rates on home-equity lines of credit have dropped to 6.27% from 8.25% since September of last year, according to Bankrate.com. Partly as a result, the amount that [...] [...more]
Earlier today, the Federal Reserve slashed the federal funds interest rates by 3/4 of a percentage point. This has been the 6th rate cut in the past 6 months. The New York Times Reports: “Though it was one of the biggest one-day rate cuts in decades, investors had been betting heavily that the Fed would [...] [...more]
Some borrowers mistakenly believe that federal rate cuts have a direct affect on their HELOC interest payments. In reality, federal rate cuts are a move by the government meant to promote economic stimulus. These federal cuts may act as an incentive for banks to lower their own interest rates, but this is not always the [...] [...more]
