fixed rate home equity loan
Fitch Rates HSBC Home Equity Loan Trust (USA)(HELT) 2006-1
The 'AAA' rating on the senior certificates reflects the 39.50% total credit enhancement provided by the 10.5% class M-1 certificate, 7.80% class M-2 and the 21.20% initial over-collateralization (OC), and the 21.20% target OC. Initial OC is set at $279,407,406.
All certificates have the benefit of monthly excess cash flow to absorb losses. In addition, the ratings reflect the quality of the loans and the integrity of the transaction's legal structure, as well as the primary servicing capabilities of HSBC Finance Corp.
The mortgage pool consists of closed-end fixed and declining rate fully amortizing home equity loans with a cut-off date aggregate principal outstanding balance of $1,317,957,406. As of the cut-off date (June 14, 2006), the weighted average loan rate is approximately 8.42%, and the weighted average original term to maturity is 322 months.
More fixed rate home equity loan info
Report: Borrowing Against Your Home More Expensive
Washington, DC (AHN) - It's getting more expensive for customers to borrow against their homes as the Federal Reserve continues to raise interest rates. The Federal Reserve in late June voted to raise short-term interest rates for the 17th consecutive time.
Currently, interest rates are at 8.2 percent. That's an increase from 8.01 percent the week earlier and the highest since March 2001 when the rate was 8.25 percent.
Analysts say a year ago, equity lines of credit were an average of 6.38 percent. Two years ago, it was 4.83 percent.
There are several alternatives for consumers. You can pay down the lines of credit, or shift to a fixed-rate home equity loan. The home equity loan may be the way to go since they're averaging 7.8 percent.
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