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Prime Equity Line of Credit

A good way to keep the interest on home equity and real estate equity lines of credit low is to get a prime equity line of credit.

A prime equity line of credit is a line of credit with an interest rate based on the prime rate. The prime interest rate is the rate charged by banks to their best customers usually those with high income and good credit ratings. Property owners will want the prime equity rate because it is usually the lowest interest rate available.

A property owner will want the lowest interest rate available because the cost of lines of credit is usually determined by the interest rate. The interest rate is added to the balance of unpaid credit which increases the amount the owner will have to payback. Getting a lower interest rate can enable the owner to pay less back on a line of credit.

Who Qualifies for a Prime Equity Line of Credit

Generally lenders will make a prime equity line of credit available to property owners that have a good credit rating. The prime equity rate is designed for borrowers who present the least risk of not paying the line of credit back. Those with good credit ratings are considered the least risky borrowers.

An individual with a good credit rating might be able to get a prime equity line of credit. A person with an excellent credit rating should have no problem getting a prime equity line of credit. Those with bad or poor credit ratings will probably have to jump through a few hoops to get a prime equity line of credit.

A property owner will probably have to have a lot of equity in order to get the prime equity rate. The reason for this is that an equity line of credit is secured by equity in the property. Equity is the difference between the property’s value and the amount it is mortgaged for. The more equity you have the bigger the line of credit you can qualify for.

Some lenders also have income requirements on prime equity lines of credit. There are lenders who will charge the prime interest rate to property owners that can demonstrate they have a high income. Some lenders may decline to charge the prime interest rate to borrowers that can’t provide proof of a lot of income.

How to Get a Prime Equity Line of Credit

The way to make sure that you get a prime equity line of credit is to find out what the prime rate is. Business websites like the Wall Street Journal and MSNBC post the prime rate everyday. Check these and find out what the prime rate is.

When you start looking for an equity line of credit online compare the rates offered to the prime rate. If the rates don’t match the prime rate start looking for the prime rate elsewhere. Websites like Bankrate.com and Lending Tree allow a property owner to compare equity line of credit offers.

Don’t be afraid to ask lenders for the prime rate if you don’t see it offered. Most online lenders have phone numbers, e-mails and other methods of contact available. You should be able to use these to communicate directly with a representative of the lender. When you do this ask the representative if you can get an equity line of credit with the prime rate. Lenders want your business so they might give you a line of credit with the prime rate to get your business.