QUOTE (TommyK @ Mar 4 2009, 02:50 PM)
To answer a few inquiries about LOC. What it boils down to is either your LOC is secured or unsecured.
Yes, banks have complicated measures on whose unsecured LOC get affected by this market condition. Simply put, credit score and "relationship" with a bank will be the main determinants (at least for HSBC). Say a client only has a chequing and an unsecured LOC with "OK" credit. He/she is very likely to experience an increase of rate by April 1st. On the other hand, if you have a strong relationship with a bank (ie. HSBC's Premier clients with multiple products and deposits/loans), then your unsecured LOC is NOT affected at this point. Of course, Premier client means you will meet the minimum criteria of $150K deposit or $350K total debt. (not hard at all in this group of investors.. LOL)
Nicola:
Don't quote me, but you might be getting a letter saying that your Equity Power Mortage HELOC will be priced from prime to prime + 1%, which is in line of the market. If you haven't received a letter, then that's good for you!!
I don't know what other banks are doing to their "valued" clients. At least for HSBC, certain clients are not affected as much at this point. But who knows what is going to happen! PRIME RATE JUST DROPPED TO 2.5%!!!
Happy Investing!
Regards
Tommy Kao
Just got the letter from HSBC - our Equity Power HELOCS are going up .5% (as of March 30- prime + .5%) - so it negates the drop in prime. Guess I should be happy that it's only .5%(?)
Would be nice if, when interest rates go back up, they cut it back down again, but I guess that's never going to happen!