HelocBasics » rates

Current Deals on HELOCs – Great if You Can Qualify

Jamie — Thu, 29 May 2008 04:20:55 +0000

Lending standards have tightened. But, if you still qualify to take out a HELOC, you may be able to snag a super deal. Since HELOC rates are tied to the federal funds rate, you’re likely to have a very low monthly payment.

Here are a few HELOC deals out there right now, as discovered by TheStreet.com:

In Abilene, Texas, Bank of America is offering a rate of 4.99% on lines of credit between $100,000 and $300,000 (up to 80% LTV) with no annual fee.

In Bradenton, Fla., GTE Federal Credit Union is offering a rate of 4.00% on lines of credit between $5,000 and $250,000 (up to 80% LTV) with no annual fee.

In Garfield Heights, Ohio, Ohio Catholic Federal Credit Union is offering a rate of 3.74% on lines of credit between $5,000 and $50,000 (up to 80% LTV) with no annual fee.

Check with your local lenders – you may be surprised at what you can find.

See Also:

How Federal Rate Cuts Affect Your APR

How to Qualify for a HELOC

HELOC Rates Go Down – Home Equity Loan Rates Go Up

Jamie — Sun, 25 May 2008 05:39:00 +0000

As HELOC rates have nosedived, average rates on home equity loans have gone up. Some HELOC customers have suffered through line freezes and reductions, but many others are taking advantage of the low rates made possible by federal funds slashes earlier this year.

Here are the national overnight averages calculated by Bankrate.com:

$30,00

HELOC – 4.82%

HEL - 7.71%

$50,000

HELOC – 4.20%

HEL - 8.15%

As you can see, there’s a huge disparity. This makes it very difficult for borrowers to choose between the two loans. Do you want a low rate with the possibility of line freezes and rate increases? Or do you want a high rate with the stability of funds and a known monthly payment?

There’s no right answer, of course. HELOC loans tend to be a risky option right now, but some believe the risk is acceptable for the opportunity to borrow on the cheap.

See Also:

HELOC vs. Home Equity Loan

Is a HELOC Right for You?

HELOC Lending Standards Tighten, Interest Rates Drop

Jamie — Thu, 28 Feb 2008 23:30:58 +0000

Due to recent federal cuts, HELOC interest rates are dropping. Currently the average HELOC rate is 7.74% and the average fixed-rate home equity loan is 8.07%.

According to the March edition of Kiplinger’s Personal Finance, these rate cuts come at a time when HELOC lending standards are tightening – making it more difficult for borrowers to take out a loan.

Here are some of new lending requirements:

No more automated appraisals. Lenders are wary about appraising properties for more than they’re worth; in this declining market most lenders require an appraiser to do a physical property walk through before awarding a HELOC.

Decreased loan-to-value ratio. Gone are the days when borrowers could take out 100% of their equity in a HELOC. Now, it’s practically impossible to get a HELOC for over 90% of your equity’s value. HELOCs offering just 65% of the equity’s value are commonplace.

Good credit becomes necessary. Lenders are becoming less willing to work with bad credit customers. In order to qualify for a traditional HELOC, most borrowers need a credit score above 680.

Check out the full Kiplinger article for more details. See also: How to Get the Best HELOC Rates and Terms.