Prime Rate – What is it?
July 21st, 2007 by John Thomas
Prime
Wall Street Journal (WSJ) Prime Rate
This is a consensus measure of the Prime Rate, and is published in the Wall Street Journal. The Wall Street Journal surveys the large banks and then publishes their consensus “Prime Rate”, or the rate offered to clients who are considered eligible for “prime” financing terms. The Prime Rate will move up or down in lock step with changes made by the Federal Reserve Board. The Prime Rate is an important index used by banks to set rates on many consumer loan products, such as credit cards, auto loans, and certain Adjustable Rate Mortgages. When the Prime Rate is rising, variable interest rate loans and credit card rates will soon follow.
Summary:
This is a great benchmark to use when comparing your selected ARM strategy to another option. The majority of the ARM fully indexed rates will normally be lower when compared to the Prime Rate and will make sense to your business-minded clients.
This index is not readily available for use as a long-term mortgage index for consumer ARMs, but is primarily used for Home Equity Line of Credit loans and other second mortgage products.
If you would like to apply for a Delaware Home Loan, you can APPLY ONLINE HERE, you can call John R. Thomas at 302-703-0727 or send an e-mail to jthomas@primeres.com
John R. Thomas – Certified Mortgage Planner – Primary Residential Mortgage, Inc.
302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office
42 Reads Way, New Castle, DE 19720
I am a Delaware native who has been actively involved in the Mortgage and Finanace industries for over 10 years. Call me at 302-703-0727