In past years, you could basically walk into a bank and walk out with a home equity line of credit up to $30,000 with a good credit score and with just about no questions asked. Today you should expect a lot more due diligence by the lender who approves your home equity line of credit application.
Some lenders will only give you a home equity line of credit up to 70 percent of what the bank thinks your home is worth. If there have been declining values in your area, you might be surprised to find out that you don’t actually qualify for a home equity line of credit in any amount because your current loan exceeds that home loan-to-value ratio based on what the bank feels your home is now worth.
If you know that your current home loan-to-value ratio is somewhat less than the 70 percent, you might be able to get a small line of credit – but at a higher interest rate.
During the real estate boom years, you could get variable rate home equity line of credit at “prime minus 1.” That means that your interest rate would float based on the prime rate (which is currently 3.25 percent), minus 1 percent for an effective interest rate of about 2.25 percent.
Today, lenders are offering far less advantageous rates. In some cases, home equity line of credit rates offered today may be as high as the prime rate (3.25 percent) plus 2 percent or more, for an effective interest rate of 5.25 percent.
Some lenders will offer lower rates for higher lines of credit, so it pays to shop around and compare rates.
Read more about home equity loans and if you can refinance your mortgage into a home equity line of credit.
It is officially my one year anniversary on Active Rain. It’s been a great relationship and I am sure it will keep going strong. Active Rain really is a great site for real estate professionals and consumers to come together and exchange advice and stories.
I’ve had a great time here and have learned a lot. Starting out I didn’t know what points were or how you got them, how to post to groups, how to join groups even, but now I have over 100,000 points and am an active member of several groups here on Active Rain.
That’s been the secret to my success here: being ACTIVE!
I have always tried to comment as often as I post blogs, because it is important to cultivate a network and relationships online in order to have them transfer into the real world.
What’s Coming Up for Me & Active Rain…
I am currently working on another book. This one is called “Buy, Close, Move IN!” and I hope to have the first draft done by the end of this week. In addition to that project, I am having another event in Atlanta in October. This one is about Foreclosures and Short Sales so if you are interested in attending, sponsoring or sharing your knowledge on the subject contact me as soon as you can!
If you haven’t checked out my site (ThinkGlink.com) before, please do. There is a ton of information there. I have articles, podcasts from my radio show and videos, that are all available to you. I also have 14 different Ebooks for sale, that cover everything from saving a little extra cash every month to picking out the right health insurance.
If you join my Facebook Fan Club Page, you will receive my best selling eBook "How to Save $50 Per Month--Or More!"
Some of my other eBooks are:
The Clutter Collector: How To Get Rid Of Clutter Everywhere In Your House and Personal Finances
Last Ditch Efforts: What To Do If Your House STILL Hasn't Sold
I am glad to have been a part of Active Rain for so long. I enjoy seeing all of the changes and updates the site goes through. Definitely a sign of a healthy and active social networking site.
Thanks to everyone who reads and comments on my blog, I appreciate it. Keep it up!
hould you buy a new car or a used car? There are plenty of factors that will weigh in on the decision, including what kind of financing you can buy, and which car is ultimately the better deal. Also, with the Cash for Clunkers deal, you might get a better deal if you're trading in a used car with a lot worse gas mileage for a new car with great gas mileage.
One reader asked me what I thought and I answered.
I think I'd buy a used car right now, since the depreciation on new cars has been extremely steep. The only kind of new car I'd think about buying would be a one-year old model that has never been driven. So, you get the depreciation, but you are also basically getting a new car.
The dealer lots are littered with new and used cars for sale. There are amazing opportunities out there right now for anyone looking to get behind a different set of wheels. Just make sure you take the warranties that are offered.
One new factor: The Cash for Clunkers program. You may be able to get up to $4,500 if you trade in your old car with bad mileage for a new car with a lot better mileage. If you can get $4,500, it may make economic sense to buy a new car - if you can find a good enough deal.
Plan on keeping the car 7 to 10 years unless you drive 15,000+ miles every year or need a nice car for work (because you're carrying clients, for example). You will save thousands of dollars in car expenses over your lifetime.
Read the full article including my take on financing a new car at: http://www.thinkglink.com/article/2009/07/23/buying-a-new-car-or-a-used-car
I’ve been hearing that homes are starting to sell. Home sale prices seem to be a little (or a lot, depending on the location) lower than what the sellers were hoping to get - except for those who are just thankful they’re able to sell at all.
Are home prices going up or down? Until recently, there was no way make money on the pure rise or fall of home prices other than selling your own real estate. But thanks to Robert Shiller, co-founder of the S&P/Case-Shiller home price index and now MacroMarkets’ chief economist and co-founder, you can lay a bet that house prices are going up or down.
At the end of June, MacroMarkets launched two exchange traded products linked to the U.S. housing market:
The two exchange traded products (they can’t be exchange traded funds because the underlying asset consists of about 25 million homes in 10 metro areas) are tethered together and own U.S. Treasuries and cash. As Sam Masucci, MacroMarkets’ President and CEO explained to me this morning, the assets are traded between the two products: If the S&P/Case-Shiller index goes up, UMM benefits by receiving assets from the DMM. If the index goes down, DMM benefits at the expense of UMM.
The product term is five years. Masucci says that he and Shiller chose a 5-year term because “it’s a bet on where housing prices will be in five years.”
To read the rest of my interview with Sam Masucci and a more detailed explanation of the exchange traded products read the full story on my CBS MoneyWatch Blog: http://moneywatch.bnet.com/saving-money/blog/home-equity/are-home-prices-going-up-or-down-place-your-bets-here/726/?tag=col1;blog-river
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I run a Chicago-based media publishing company specializing in real estate and personal finance content for online and offline applications. We also create corporate and online videos.
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