5 Million Borrowers
Face Imminent Payment Shock
By Black Knight Financial's estimate, 2.5 million Americans will see an average $250 more tacked onto their monthly mortgage payment as interest rates on home equity lines of credit reset over the coming three years. Should borrowers tap into more of their available credit during that time, however, the payment increases could be even more drastic. Kostya Gradushy of Black Knight notes that HELOC borrowers whose rates are coming up for reset currently are using slightly less than 60 percent of their available credit. But if they access more of those funds, the monthly increase in their mortgage payments likely will exceed the $250 estimate. For those who are looking at a rate reset in 2019 -- a group that is using about 40 percent of their available credit -- the monthly hike in their mortgage payments is expected to be about $200.
From "2.5 Million Borrowers Face Imminent Payment Shock"
Housing Wire (09/02/14) Swanson, Brena
By Black Knight Financial's estimate, 2.5 million Americans will see an average $250 more tacked onto their monthly mortgage payment as interest rates on home equity lines of credit reset over the coming three years. Should borrowers tap into more of their available credit during that time, however, the payment increases could be even more drastic. Kostya Gradushy of Black Knight notes that HELOC borrowers whose rates are coming up for reset currently are using slightly less than 60 percent of their available credit. But if they access more of those funds, the monthly increase in their mortgage payments likely will exceed the $250 estimate. For those who are looking at a rate reset in 2019 -- a group that is using about 40 percent of their available credit -- the monthly hike in their mortgage payments is expected to be about $200.
From "2.5 Million Borrowers Face Imminent Payment Shock"
Housing Wire (09/02/14) Swanson, Brena
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Home Equity Lines of Credit Surge as Banks Approve Loans to More and More Owners
Homeowners nationwide are accessing home equity credit lines at an increasingly faster clip. New data from Experian and researchers at the Oliver Wyman consulting organization shows that owners have extracted approximately $120 billion in new home equity credit lines in the last year -- 27 percent more than in the 12 months prior. In some states, new home equity line borrowing is mushrooming: up 169 percent in Wyoming, 53 percent in Florida, and 52 percent in Ohio. Dollar volumes of new lines are highest in areas with the priciest residences, particularly in the Northeast and along the West Coast. In California alone, almost $6 billion in new equity credit lines have been originated over the last 12 months, researchers report. For owners with high credit scores, the average amount that can be drawn down on new lines is just under $120,000. Banks even appear to be lending to applicants with poor credit. New credit lines to "deep subprime" owners -- those with the worst credit files -- topped out above $30,000 in the three-month period ended June 30.
From "Home Equity Lines of Credit Surge as Banks Approve Loans to More and More Owners"
Washington Post (08/30/14) P. 6 Harney, Kenneth R.
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