The seventeen consecutive rate hikes passed on by the Federal Reserve since mid-2004 have had a big impact on HELOC borrowers and lenders. Many borrowers have refinanced their HELOCs into fixed-rate home equity loans or paid down HELOC balances to escape higher monthly payment requirements - which in some cases have more than doubled.

Lenders, meanwhile, have responded with expanded offerings like HELOCs with fixed rate lock options (FRLO). Now comes word of an additional offering - a fixed rate HELOC.

In June, Secured Funding (Costa Mesa, CA) launched a HELOC loan product that has a fixed rate for the first year, then reverts to to a traditional HELOC with a variable rate. According to Home Equity News, Secured Funding plans to offer HELOCs with two- or three- year fixed rates in the future. According to the company:

The new HELOC offers the protection and security of fixed interest rates in a rising rate environment, but still provides the flexibility of a HELOC, allowing borrowers to draw on their lines.

Strangely, Secured Funding’s website doesn’t appear to have any additional information about this new product (as of 7/29/06). A call to the firm confimed they are offering this product, but the customer service rep we spoke with could not point to specific information about the fixed rate HELOC on the web.

An interesting concept and, perhaps, a promising product. If you’re interested in learning more, Secured Funding’s toll-free number is 800 891 2105.

Technorati Tags: rate hikes, Federal Reserve, HELOC borrowers, HELOC, fixed-rate home equity loans, Secured Funding