As you know, the Prime Rate was lowered a half point last week.  Just another bone offered by the Fed to show they are trying to help the credit crunch. Will it help stimulate some short term lending?  Maybe to the big boys, but not to you and me.

 

What it will do is lower the monthly payment on existing home equity loans as well as bring the (teaser) rate down to 4.5% on new home equity loans. So, please check your statement when it comes in this month.  Make sure your interest rate is ½% lower than last month and see how much lower the payment is.  Also, see if your available line of credit was frozen or lowered this month. Banks are doing this without telling the customer.

 

There are HELOC’s still out there.  MY big secret is WELLS FARGO.  That bank still offers HELOC’s at low rates and no closing costs.  There is a catch though; you need to have a first mortgage with Wells.  You also need to have a 660 FICO score and the combined total loan to home value cannot exceed 80%.  So, if you need one and qualify, call WELLS.

 

Here is another tip, if your interest rate went down and lowered your payment by 50-100 bucks, send in the same amount as you have been and start to lower the principle amount.  This is not rocket science, pay it down!

 

Dale Siegel