I applied online to Amplify Credit Union last week, and got a call today that I was conditionally approved with a variable rate of prime+0%, still have all the title check, apraisal, etc. to do, so is early in the process.
They pulled FICO mortgage scores, and used the middle score. My midle is 740, which I believe is a typical break point for the best HELOC rates.
How do they make money at prime+0%?🤔
The prime rate is for an unsecured loan to the most creditworthy customers. A HELOC is a secured loan; if one defaults, the creditor can foreclose on the property. It is effectively another mortgage with the property as collateral.
That reduces the risk to lender versus an unsecured line of credit or credit card.
As another DP, my CU HELOC just jumped up to 7% on my last statement. It was originally 3.99%.
Thanks, I had forgotten the difference between what the federal funds rate and the prime rate is.
The current federal funds rate is 4.5%, and the current prime rate is 7.5%, so the bank makes their money off the 3% difference between what the money costs them, and the interest they charge me.
My credit scores only just recovered into the mid to upper 700s over the past month, it has been a while since I qualified for anything better than prime+ huge risk margine.
Third Federal has rates of Prime minus 1.01% or minus 0.26%, based on your balance. I had this HELOC years ago when it was something like 1.99% and I used it to buy a car back when you could use any HELOC interest paid as a tax deduction. I had to pay it off and close it when we refinanced and I never bothered opening up another HELOC after that. Rates are much higher now, obviously, but I do think this is one of the best HELOCs around.
https://www.thirdfederal.com/borrowing/home-equity
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I finally got to close on the HELOC with Amplify at prime+0%.
Had a few weeks delay clearing up a very old lien I had forgotten about...😏
Now I just need to not be stupid with it. I've never had access to this much debt with just a few mouse clicks!🤣