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HomeYour Home Equity Payment may go down: Mort...

Your Home Equity Payment may go down: Mortgage Industry

Although the Fed cut of 1/2 point in the Fed Funds rate does not directly affect Mortgage rates, the 1/2 point cut in the Prime Rate may make your HELOC payment go down!  Most Home Equity Lines of Credit or HELOC's are based on the Prime Rate plus a margin!  So some homeowners with this type of mortgage will see a decrease in their Interest Only payment next month!   See the story below on cnnmoney.com for more information.

  • Borrowers get small break from Fed
  • Those with home equity loans and lines of credit didn't just hit the jackpot - but every little bit helps.  By Ismat Sarah Mangla, Money Magazine reporter September 18 2007: 4:17 PM EDT
  • NEW YORK (Money) -- After the Federal Reserve's half-point cut in interest rates Tuesday, homeowners may experience some welcome - if small - relief.  Borrowers with home equity lines of credit (HELOCs) will notice savings immediately, says Keith Gumbinger, vice president of HSH Associates. FULL STORY

Your mortgage partner for life,  

Rey "Steak Dinner" Gallegos
Senior Loan Officer
Five Star Mortgage
Website: http://www.steak-dinner.com/
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Approved in NV, CA, UT, NM, AK, and FL
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Posted Tuesday Sep 18
(09/18/07 04:29PM) — Karl Christen Utah Mortgages~Mortgage Planning Expert

true, but this is like putting your finger in a dam at this point.  We need allot more then one 50 basis point reduction in rates.  I'd like to see Congress and the Senate pass some other measures to increase federally insured mortgages.  Say $500k in large metro area's, and raise the limit to 250-280 in other area's.  This would help allot of these borrowers and insure the banks from huge losses.  We've got a serious problem, and it's going to take more then the fed.

(09/18/07 04:30PM) — Rey Gallegos Home Loan Consultant Las Vegas, NV

Jeff,

Too true!  I do my best not to publisize doom and gloom stories because all it does is spread the hysteria.  I have to admit that I think the media has curbed the negative hype this past week.  It's a start!

(09/18/07 04:34PM) — Rey Gallegos Home Loan Consultant Las Vegas, NV

Karl, Agreed. This is not a problem solver BUT this will let the public know that the fed is doing what t can to help!  Also, it will get the media putting out "The fed saves the day stories!" instead of "If you own a house you will die!" stories.  We all know that perception is reality so lets take it for what it is which is a good not a bad thing.  We have to start somewhere.

(09/18/07 10:33PM) — Jeffrey Judge

Rey, Good post. I have to agree with Andrew. Cutting rates is like putting a bandaid over a bullet wound. I mean, it will help some people out, but if we don't wise up and change for the better as a whole, then we will only wind up in the same situation again in another five years (maybe worse).

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