While yesterdays .5% cut by the Federal Reserve won't necessarily translate into lower interest rates on 30 year fixed rate loans, it will lower the rate on most home equity lines of credit.  Most home equity lines of credit or HELOC's are tied to the Prime Rate, which is currently at 4.00%. TIP: If you have a home equity line of credit, the first thing to look at is what your current lender is adding to or subtracting from the prime rate to calculate your interest rate. This is called the "Margin." 

For example if you have a Prime + 2% Home Equity Line of Credit, your rate would be 4.00% + 2.00% = 6% vs a lender that has a Prime -.75% or 4.00% -.75% or 3.75%.  Most borrowers who took out a 2nd mortgage or piggy back loan, depending on how much you put down are paying Prime + 1.00% or 2.00%.  This is a great time to shop around for lenders who are offering a promotion on their home equity lines of credit or HELOC's.  Another way to take advantage of this recent rate cut is to move a portion of or all of your Line of Credit into a fixed rate.  Most lenders will allow you to do this, but the rate will be a little higher than your current rate.  But with rates at a all time low, it's probably a good time to do it.  Call your current lender to see what rate they are offering.  Otherwise shop around for a lower Home Equity Line of Credit. 

If you have any questions on your current home equity loan or mortgage related question, feel free to call my direct line at 253-472-1500 for a free consultation. 

Tacoma's #1 Mortgage Expert - Kevin Tinsley
O: 253.472.1500 | F: 866.421.1788
7403 Lakewood Dr W, STE 2
Lakewood, WA 98499