Why is the home equity loan rate going up while mortgage rate is going down?
July 23, 2008 By 3 Comments
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yes ye sye s
its the rates that are used to calculate each. I think the home equity loans use a different index that the rates are pegged to.
The two are not the same and have nothing to do with each other. The prime rate has gone up many times lately so all loan rates will follow.
When you borrow money to buy a home the bank is not the one that loans you the money. Companies bid for these mortgages and when they have a lot of money that needs to be earning something then the rate will go down. When the money is tight then the rate will go up. They will tell the bank they will buy so many millions of dollars worth of mortgages at a given rate. There are several so the rates may not be all the same. Depending on your history the bank and holding co. will decide what company will take the risk.