If you are using over 40% of your available credit, paying off your credit cards with a HELOC may improve your credit score. However, there are some risks involved. Applying and opening a HELOC will give your credit score a ding. However, you may be able to increase your score significantly by transferring your credit [...] [...more]
Several borrowers are reporting that Washington Mutual (WaMu) is still sending out HELOC freeze and reduction notices. A Los Angeles Times blog gives this account: “Last week a Realtor in San Diego wrote, ‘Just after I made a large payment of $10K (only $350 payment was due), they took away all of my credit line. [...] [...more]
Most HELOC loans have an adjustable interest rate tied to the prime rate. Your total interest = the current prime rate + your margin (the markup the lender assigned you in the loan paperwork). Keeping track of the prime rate can help you decide when to withdraw money and estimate how much your monthly interest [...] [...more]
Homeowners have two major home equity borrowing options: the home equity loan and the home equity line of credit (HELOC). Both options allow homeowners to take out a loan based on the existing equity in their properties. In both cases, the property is used as collateral and may be foreclosed upon should the borrower default [...] [...more]
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]
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]
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]
Under the federal Truth in Lending Act, a HELOC consumer is granted certain rights. Most importantly, you have the right to be given information about your HELOC before agreeing to the loan or paying any fees. You also have the right to cancel your home equity line of credit within a specified time frame. This [...] [...more]
