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Best HELOCs Cost A Little More This Fall

The best home equity lines of credit are a little more costly this fall than they were in early summer.

Back in June, a number of lenders were offering HELOCs for less than 4%. Now only a couple have deals that good, and most borrowers will pay 4.25% or more.

Back in June, a number of lenders were offering HELOCs for less than 4%. Now only a couple have deals that good, and most borrowers will pay 4.25% or more. You also need to remember that these are variable-rate loans, based on the prime rate — the interest rate banks charge the best commercial customers.

Most of the best home equity lines of credit are priced as prime plus 1% (although we did find one charging the prime plus 0%.)

Anyone with a HELOC should be prepared for the prime rate, which is a very low 3.25% right now, to go up sometime next year when the Federal Reserve starts boosting short-term interest rates.

But if you have enough equity in your home to get a HELOC, they remain the cheapest type of consumer loan. Here are some of the best deals around:

Third Federal Savings & Loan is charging 3.25% for homeowners in 18 states from Oregon to Florida for loans up to $49,999. For loans of $50,000 – $150,000, you pay only 2.99%. There’s no annual fee.

BB&T Company, headquartered in Winston-Salem, N.C. with 1,500 financial centers in 11 southeastern states and Washington, D.C., charges 4.25% with no fee and a $5,000 minimum.

Nationwide Bank, owned by Nationwide Insurance, is charging 4.50% with no annual fee.

Viewpoint Bank based in Plano, Texas, with 39 branches serving the north part of the state, offers 4.5% with no annual fee and a $4,000 minimum.

First Tennessee Bank, owned by First Horizon National Company, with branches in Arkansas, Georgia, Mississippi, Virginia and Tennessee, charges 4.25% with a $5,000 minimum and a $50 annual fee.

US Bank, which serves 24 states nationwide, has rates as low as 3.99% and as high as 9.25% in parts of California, Nevada and Arizona –- states that have suffered steep declines in home prices. You’re also tagged with a $90 yearly fee.

To qualify for one of these HELOCs you need:

  • A credit score of at least 660, with the exception of Nationwide Bank and Third Federal Savings, which require a minimum score of 720.
  • To retain 20% equity in your home after the line of credit is added on to the balance of your primary mortgage.
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