Home Equity Update: HELOC Rates Drop as Home Prices Climb
This week in home news
As Home Equity Line of Credit (HELOC) rates approach 8%, home values have reached another milestone with the 20th consecutive record-high price. In this edition, we explore topics such as how the Federal Reserve’s interest rate choices impact expenses related to home equity borrowings, reasons behind lending institutions restricting accessible equity amounts, older adults utilizing home equity for increasing long-term care expenditures, and distinctions between home equity loans and those intended for renovations. Additionally, we offer guidance on identifying unscrupulous lenders and clarifying initial low-interest promotional periods for HELOCs.
Leading headlines in home equity, mortgage news, and property market developments
Why lenders restrict your ability to use all your home equity
Soaring house values have resulted in numerous homeowners accumulating an unprecedented level of equity. However, even though your property investment might be worth hundreds of thousands of dollars, this does not imply that financial institutions will permit you to utilize all of it. Various factors restrict how much equity you're allowed to use; these limitations serve both your safeguarding and theirs. Let us explore everything involved here.
The Federal Reserve keeps interest rates unchanged: How will this affect borrowers?
Last year, when the Federal Reserve started lowering interest rates, home equity rates dropped as well. However, at their past couple of meetings, the Fed has kept interest rates steady, indicating ongoing concerns about inflation, trade tariffs, and job market uncertainties. How does this affect homeowners with Home Equity Lines of Credit (HELOC) or those thinking about obtaining new home equity loans?
House values continue to rise steadily.
According to the most recent data from S&P CoreLogic’s Case-Shiller Index, home price growth rose by 4.1% in January, marking the 20th consecutive record-high month. First-time buyers are finding it particularly difficult due to both sky-high property values and soaring interest rates on mortgages. Can these aspiring homeowners expect relief anytime soon?
When comparing a home equity loan to a home renovation loan, which one is more suitable?
If you're considering a renovation to enhance your living space, you might find yourself choosing between a home equity loan and a home renovation loan. Despite their similar names, these loans have distinct differences. We've compiled an informative guide covering aspects such as loan amounts, interest rates, approval durations, and repayment periods to help you decide which option suits you best.
Why you may require your home equity in the future
The expense associated with aging elegantly amounts to a significant figure: $100,000 annually and climbing for prolonged care services. In such scenarios, home equity serves as an essential resource. Many older adults possess substantial home equity which they can leverage to cover health-related expenses during retirement. Below are several possible strategies along with considerations regarding their advantages and disadvantages.
ICE Mortgage Monitor March 2025 Source:
Avoid becoming a victim of predatory lenders.
Even though they're not as common now, there are still dishonest loan providers who aim to attract inexperienced borrowers. High-interest rates, early repayment charges, and concealed fees are among their tactics. Below are some red flags to watch for and steps you can take to safeguard yourself against such pitfalls.
Rates round-up
Yet another week, yet another lower Home Equity Line Of Credit rate...
The interest rates for home equity lines of credit (HELOCs) have been decreasing and are now approaching 8 percent—a figure last observed in 2023. Additionally, the average rate for a $30,000 home equity loan stands at around 8.37 percent, marking the lowest point this year in 2025.
...as mortgage rates slowly rise
Even though the current average for a 30-year fixed-rate mortgage has reached 6.78 percent, this figure remains notably under the 7 percent threshold from one year prior.
Just in case you didn't catch it
These tales were technically unveiled in the past few weeks, yet they remain worthy of attention.
The scoop on super-low Home Equity Line of Credit deals
These rates are known as teaser rates because lenders aim to attract you using temporarily low initial offers. On the surface, these appear beneficial; however, it’s crucial to thoroughly review all terms and conditions—ensuring you comprehend what occurs once the promotional phase concludes.
Credit union undergoes a transformation
Following 83 years as Bethpage Federal Credit Union, this esteemed financial organization has formally transitioned rebranded itself As FourLeaf Federal Credit Union. This renaming occurs as the northeastern provider of home equity lines of credit (HELOCs), mortgages, and various other financial services is broadening its footprint within the New York region. Whether this will be advantageous for loan applicants remains to be seen. Find out our assessment of FourLeaf.
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