Private lending *IS* 1-to-1 with "the fed dropping rates to 0%"

[Chris Mason]

Click bait headline, but a fair amount of truth to it. :) 

A lot of "private lenders" are actually borrowing on a personal HELOC to re-lend to you. Their profit margin is the difference between their HELOC rate, and the rate they are charging you (+ fees).

Almost all HELOCs are adjustable rate mortgages, with their rates tied via a round-a-bout way to the federal funds rate (the thing that just dropped to 0%). There is a floor and a ceiling, perhaps 1.5% is the floor for Fred's HELOC. Fred's HELOC rate didn't just drop from 4% to 0%, but it did drop all the way to that floor of 1.5%. 

Fred might be feeling a little more generous at present. 

If you ARE that person with that HELOC that just went from 4% to 1.5% (2.5% drop), you could lower what you are charging by 1% and still come out ahead.