The Federal Reserve Board cut the Fed Funds Rate another half a percent during their regular scheduled meeting yesterday (January 30th, 2008). What exactly does this mean to you? Well, the Fed Funds Rate directly influences Prime. And any of your credit cards, home equity lines of credit or other short term loans are affected by this decrease in rate.
The Fed Funds Rate currently rests at 3% making Prime 6%. However, when you signed the paperwork on your Home Equity Line of Credit you more than likely had a margin associated with your loan. So your new rate is 6% plus your effective margin. You can contact your Home Equity Line Servicing Company and find out exactly what that meant to your payment.
Good news is HELOCs were a very popular item over the past couple years so many home owners are going to be thankful for another decrease in rates. If you company has not adjusted to reflect this decrease in Prime, then you need to ask them WHY???
Those of you interested in a HELOC
Call me at 702-271-1274