Latest news with #creditworthiness
Yahoo
5 days ago
- Business
- Yahoo
HELOC rates today, July 25, 2025: Pay less than $400 per month on a $50K draw
HELOC rates today remain under 8.75%. Even with a cash draw of $50,000, your monthly payment on a home equity line of credit could be under $400 a month — and that's not even considering a low introductory rate. (We did the math for you at the bottom of this article.) A HELOC is best used to increase the value of your home, with upgrades, repairs, and additions. However, sometimes life demands different plans. In that case, a HELOC can serve as a temporary emergency cash machine. As always, debt deserves attention. It's best to pay it off as soon as you can. Here's the latest on HELOC interest rate trends. This embedded content is not available in your region. HELOC rates Friday, July 25, 2025 According to Bank of America, the largest HELOC lender in the country by volume, today's average annual percentage yield (APR) on a 10-year draw HELOC is 8.72%. That is a variable rate that kicks in after a six-month introductory rate, which is 6.49% in most U.S. states. Of course, your personal HELOC rate will depend on various factors, including where you live and your creditworthiness. Homeowners have a staggering amount of value tied up in their houses — more than $34 trillion at the end of 2024, according to the Federal Reserve. That's the third-largest amount of home equity on record. With mortgage rates lingering in the high 6% range, homeowners are not going to let go of their primary mortgage anytime soon, so selling a house may not be an option. Why let go of your 5%, 4% — or even 3% mortgage? Accessing some of that value with a use-it-as-you-need-it HELOC can be an excellent alternative. Dig deeper: Is a HELOC a good idea? Pros and cons to consider. How lenders determine HELOC interest rates HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which today is 7.50%. If a lender added 1% as a margin, the HELOC would have a rate of 8.50%. Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home. Shop two or three lenders for the best terms. And average national HELOC rates can include "introductory" rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate. Up Next Up Next How a HELOC works You don't have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a second mortgage, such as a home equity line of credit. The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat. Meanwhile, you're paying down your low-interest-rate primary mortgage like the wealth-building machine you are. Learn more: How do fixed-rate HELOCs work, and which lenders offer them? This embedded content is not available in your region. Look for introductory rates, but be aware of a rate adjustment later Today, FourLeaf Credit Union is offering a HELOC APR of 6.49% for 12 months on lines up to $500,000. That's an introductory rate that will convert to a variable rate later. When shopping lenders, be aware of both rates. And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity. The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don't pay interest on what you don't borrow. HELOC rates today: FAQs What is a good interest rate on a HELOC right now? Rates vary so much from one lender to the next that it's hard to pin down a magic number. You may see rates from 7% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are. Is it a good idea to get a HELOC right now? For homeowners with low primary mortgage rates and a chunk of equity in their house, it's probably one of the best times to get a HELOC. You don't give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt. What is the monthly payment on a $50,000 home equity line of credit? If you take out the full $50,000 from a line of credit on a $400,000 home, your payment may be around $395 per month with a variable interest rate of 8.75%. That's for a HELOC with a 10-year draw period and a 20-year repayment period. That sounds good, but remember, it winds up being a 30-year loan. HELOCs are best if you borrow and pay back the balance in a much shorter period of time.
CTV News
5 days ago
- Business
- CTV News
Edmonton gets an AA+ in credit
Edmonton's been rated by a financial analytic agency, and the city is doing better than ever before. S&P Global, which assigns credit ratings to companies and countries, gave Edmonton an AA+, meaning that the city has strong 'financial health and creditworthiness.' In a release, S&P said it's a stable outlook and an increase from an AA rating in 2024. It improved, they said, based on the 'expectation that the city will maintain strong budgetary performance,' largely in part due to LRT construction projects winding down and stabilizing investments. 'Our upgraded AA+ rating speaks to the city's commitment to carefully and transparently managing taxpayer dollars,' said chief financial officer and deputy city manager Stacey Padbury in the release. The agency also noted that the city has an experienced management team, strong policies and detailed long-term financial plans. In a longer report, S&P wrote Edmonton's economy, albeit being largely in the energy sector, remains 'robust despite slower population growth.' 'We're continuing to use debt strategically to help us build and maintain the bridges, fire halls, LRT, libraries, roads and other infrastructure that Edmontonians need now as we grow,' Padbury said. The agency said this rating will further help Edmonton get approved for long-term borrowing from the province at favourable rates.
Yahoo
20-07-2025
- Business
- Yahoo
FICO To Roll Out New Scores to Reflect Your "Buy Now, Pay Later" Habits, Impacting Millions of Americans' Credit
"Buy now, pay later"users may hurt their credit if they don't pay back those loans on time. Credit score overseer Fair Isaac (NASDAQ:FICO) announced new scoring models last month that will evaluate BNPL usage when determining credit worthiness. The program, scheduled to roll out this fall may help some folks gain access to better loan terms but failing to pay on time is going to hurt. The processing services let retailers provide installment loans at the point of sale so buyers can spread out payments. The loans may have no interest or service fees, potentially encouraging customers to overspend. Not surprisingly, a Bankrate survey released in May showed that about 'half of buy now, pay later users have experienced issues like overspending and missing payments.' Don't Miss: —with up to 120% bonus shares—before this Uber-style disruption hits the public markets $100k+ in investable assets? – no cost, no obligation. FICO will include BNPL data on upgraded Score 10 and Score 10 T credit models. It wants the new data to provide lenders with "greater visibility into consumers' repayment behaviors, enabling a more comprehensive view of their credit readiness." FICO Vice President and General Manager of B2B Scores Julie May emphasized the impact on young buyers, noting it will "more accurately evaluate credit readiness, especially for consumers whose first credit experience is through BNPL products." Using FICO's Score 10 to roll out the initiative has raised some eyebrows because it won't be included in Score 8, currently the most widely used credit scoring product. In fact, FICO modeling is now up to Score 16 but, like the iPhone, older versions remain broadly popular due to long credit cycles and the need for lenders to invest, train and incorporate newer processes. Trending: Named a TIME Best Invention and Backed by 5,000+ Users, Kara's Air-to-Water Pod Cuts Plastic and Costs — Credit agencies have gathered BNPL loan activity for several years now. But this is a largely unregulated industry and not all payment processors report these transactions. So, a substantial chunk of U.S. lending activity may be missing from current data. FICO's new models will try to fill these gaps but there could be unintended consequences because, according to the survey, nearly one-third of Americans have used the service. Bankrate Senior Industry Analyst Ted Rossman told CNN that young folks with limited credit histories are frequent users, and those most vulnerable to credit downgrades. Given survey results, new models may amplify negative credit scores of those overspending and missing payments. Of course, it's hoped this credit activity will boost scores if debts are paid on time and in promises to aggregate multiple BNPL loans, but dangers abound if old school installment loan scoring seeps into the new models. Its common knowledge that borrowing up to your credit card limit is bad for your score because it signals financial stress. Now consider a young buyer who takes multiple BNPL loans at the same time. With traditional scoring, it looks like the customer is maxing out multiple short-term credit lines, raising all sorts of red flags. Rossman believes that customers who pay their debts promptly should be fine under the new rules, but hedges his bets despite FICO assurances. "Things like frequent opening and closing of accounts would be disastrous for your credit score," he told CNN. "With Buy Now, Pay Later, you're doing that every few weeks or even every few days." Read Next: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? FAIR ISAAC (FICO): Free Stock Analysis Report This article FICO To Roll Out New Scores to Reflect Your "Buy Now, Pay Later" Habits, Impacting Millions of Americans' Credit originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Bloomberg
16-07-2025
- Business
- Bloomberg
The FICO Monopoly Is Living on Borrowed Time
Few companies achieve the ultimate branding victory of seeing their name enter everyday language. In finance, one company is up there, joining Google, Xerox and Hoover on this hallowed list. When Americans talk about their 'FICO score' they're referencing a specific product from a specific company, yet the term has become synonymous with creditworthiness itself. That linguistic dominance reflects the market dominance of Fair Isaac Corp. (whose ticker symbol is, of course, FICO). The Bozeman, Montana-based company's credit scores are used by 90% of top lenders, making the company's algorithm the de facto gatekeeper for American consumer finance. The company has monetized this algorithmic moat for decades, turning what began as a consulting firm in 1950s California into a financial-technology powerhouse. Its shares have averaged an annual gain of more than 30% since the crash of 2008, trouncing even the Nasdaq 100, home of the fabled FAANG stocks. That run came to a sudden halt last week. Under new Director Bill Pulte, the Federal Housing Finance Agency moved to allow mortgage lenders to use a competitor's model, VantageScore 4.0, alongside FICO when originating loans for Fannie Mae and Freddie Mac. 'If you use Vantage and not just FICO, for the betterment of the American people and the consumer, you should get better pricing,' posted Pulte. 'It's just math. Predictive math.'
Bloomberg
08-07-2025
- Business
- Bloomberg
FICO Drops, CoreWeave Dips, Big Banks Slide
On this episode of Stock Movers: - Fair Isaac (EFX), better known as FICO, saw shares headed for its worst slide since March 2020, after federal regulators said government-sponsored mortgage entities Fannie Mae and Freddie Mac will be able to use a second firm when determining borrowers' creditworthiness. Federal Housing Finance Agency Director Bill Pulte said in a post on X that Fannie and Freddie will now allow lenders to accept the Vantage 4.0 credit model to 'increase competition' in the credit score said the move should expand credit access to millions of potential borrowers living in rural areas and bring down closing costs. Since joining the FHFA, Pulte has pledged to do 'a full scale review' of all credit bureaus. He also suggested that FICO should focus on being more economical in their pricing. - CoreWeave (CRW) shares dipped after it was downgraded to neutral-equivalent ratings at Stifel and Mizuho, following the company's all-stock acquisition of data-center operator Core Scientific Inc. The Cloud infrastructure provider was also initiated with a hold rating at CFRA while Citi adds a 90-day downside catalyst watch to the stock. - Big bank stocks, including shares of Bank of America (BAC) slid after some analysts warned of downside risks. HSBC is turning cautious on three of the biggest US bank stocks following a record rally that's brought the group within shouting distance of an all-time high. 'Downside risks associated with still-elevated macro uncertainty, potentially slowing economic growth and more interest rate cuts through 2025 and 2026 are generally not factored into the stock prices,' analyst Saul Martinez wrote in a note downgrading JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. At the same time, 'the repricing of fixed-rate assets, benign credit quality, improving investment banking activity, and a favorable regulatory backdrop are well priced in.'
