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How to Find the Best Rates on HELOCs

Updated from 9:23 a.m. EDT regularly looks into available rates on a variety of banking products. This article's focus is on home-equity lines of credit.

Countrywide (CFC)froze 122,000 home-equity lines of credit in January. After tightening its underwriting standards earlier this year for new HELOCs, Chase (JPM) started sending letters to "a relatively small group of customers" modifying current lines of credit, a Chase representative said. And other banks may be reviewing their loans.

But if you manage to convince your bank to let you use your house as a piggy bank, at least you probably won't be paying more than before.

The vast majority of HELOCs are still tied to the prime rate, as published by The Wall Street Journal, and margins aren't growing significantly, says Stuart Feldstein, president of SMR Research, a business and market research firm.

But even with plummeting home prices and banks tightening underwriting standards, not everyone is bearish about prospects for home-equity loans for the year.

"We have a prime rate that's falling like a stone, and the differential between home equity loan prices and credit card prices keeps widening," Feldstein says. "This creates really powerful incentives to use home equity loans, if you can get it, to pay off credit-card debt or use a loan for other general uses."

Feldstein expects the housing market to stabilize and a slight overall increase in home-equity lending in 2008 .

So if you are in the market for a HELOC -- and it helps if you're in a stable housing market and have great credit -- here are some highlights from All rates based on a loan to value ratio of up to 80%. Other fees, terms and conditions, including geographic, may apply. Check with the institution for further details.

  • Internet Bank MetLife Bank (MET), National Association is offering a $26,000+ HELOC at 5% in several states.

  • In New York, Internet Bank State Farm Bank is offering a $10,000 to $500,000 HELOC at 5.25%.

  • In New York, Citizen's Bank, National Association is offering a $50,000+HELOC at 5.49%.

  • In Illinois, MB Financial Bank, National Association is offering a $100,000+ HELOC at 4.950%.

  • In Illinois, Fifth Third Bank (FITB)is offering a $5,000 to $300,000 HELOC at 4.99%.

  • In California, County Bankis offering a $10,000 to $500,000 HELOC at 5%.

  • In California, Wachovia Bank, National Association (WB) is offering a $100,000 to $249,999 HELOC at 5.25%.

  • In Texas, Compass Bank is offering a $35,000+ HELOC at 5%.

  • In Texas, Internet Bank Comerica is offering a $50,000 HELOC at 5.25%.

  • In Florida, Wachovia Bank, National Association is offering a $100,000 to $249,999 HELOC at 4.75%.

To search for local rates on home-equity loans and home-equity lines of credit, go to

Know What You Own: JPMorgan operates in the financial services industry, and some of the other stocks in its field include Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS), Merrill Lynch (MER), Bank of America (BAC) and Lehman Brothers (LEH). These stocks were recently trading at ($18.14, -8.29%), ($142.49, -9.16%), ($35.89, -9.25%), ($37.55, -13.70%), ($34.25, -4.03%) and ($25.59, -34.92%) respectively. For more on the value of knowing what you own, visit's Investing A-to-Z section.

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