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Article: Paying Off the Equity Line Is All the Rage; As Interest Rates Rise, Popular Credit Choice Turns Into Drain on the Budget
- Article from:
- The Washington Post
- Article date:
- October 1, 2005
- Author:
CopyrightThis material is published under license from the Washington Post. All inquiries regarding rights should be directed to the Washington Post. (Hide copyright information)
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-- For Kim and James Merly, the home equity line of credit came
in handy -- it helped pay for their son's college education, a car
and renovations of two rental properties.
Recently, the Fairfield, Conn., couple noticed their interest rate
had jumped to 6 percent from the 4 percent they paid in January 2004
when they first opened the account. They decided it was time to pay
off the credit line.
Homeowners nationwide have seen their home equity borrowing costs
rise since the Federal Reserve began raising interest rates more than
a year ago. Many, like the Merlys, now want to pay off the loans,
which no longer look as attractive as they did a few years ago.
The rising rates mean consumers ...