This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Why HELOC Spells Good News for Homeowners and the Economy

NEW YORK ( BankingMyWay) -- Terrific news! Home equity lending is increasing!

OK, maybe it's not a world-changing event. But an uptick in home equity loans is more evidence the housing market is strengthening. And it gives another loan option to homeowners who still do have equity despite the plunge in home prices after the financial collapse.

Whether a home equity loan is a good idea is, well, open to question.

Equifax (EFX), the credit-data firm, reported Monday that in August total balances for home equity installment loans increased for the first time since November 2007. It was just a smidgeon - a rise of 0.3% -- but any gain is good.

Installment loans carry a fixed rate for the life of the loan, like a car loan or fixed-rate mortgage. You borrow a sum and make payments for a number of years. Another type of home equity loan, the home equity line of credit, or HELOC, carries a variable rate that can change monthly and works like a credit card, letting you borrow what you want, up to the credit limit, with monthly payments dependent on your outstanding balance and the current loan rate.

"The residential real estate market finally seems to be finding solid ground," said Equifax Chief Economist Amy Crews Cutts. "We're seeing signs that the contraction in mortgage debt is slowing and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis. The environment has been set for growth for a while - now it looks like it may finally be happening."

Despite the uptick, Equifax said the total number of installment loans is 43% below the August 2007 level, at 4.4 million versus 7.7 million. Balances are down 49% from their peak in September 2007, at $143 billion compared with $278 billion.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $110.38 0.00%
FB $92.07 0.00%
GOOG $626.91 0.00%
TSLA $247.57 0.00%
YHOO $30.71 0.00%


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs