HELOC rates are falling. Here’s why you should tap into your home equity now.

When it comes to financing a home improvement project, consolidating debt or covering emergency expenses, the costs can quickly become overwhelming. One way to obtain additional funds is to a Home equity line of credit or HELOC. A HELOC allows you to borrow against your home equity at a substantially lower rate than other financing options, such as Credit card or personal loan.

And now might be a good time to take out a HELOC. After rising for a while, HELOC rates are starting to show signs of cooling. If you’ve been considering a home equity line of credit, now might be the perfect moment to do so. Read on to find out why.

Check out HELOC rates here to see how much you can borrow

Why You Should Use Your Home Equity Now

Here’s why today’s rates make it an ideal time to consider a HELOC.

You will save money

The most obvious reason to tap into your home equity now is to save on interest while paying off your HELOC.

With a HELOC, you already have access to funds at a lower interest rate than other loan types. For example, the average credit card interest rate is currently around 20%. HELOC ratesOn the other hand, the average is about 8% – 50% lower.

This means significantly lower interest payments, which can make a big difference to your budget. When HELOC rates are low, you can save more.

Compare home equity rates online today.

Rates may rise again soon

Some hope of the Fed Recent rate hikes We’ll see the end for a while, it’s by no means guaranteed.

“The Fed is no longer flagging that more hikes should be expected, but it falls short of a firm commitment to ‘pause’ rate hikes,” Fitch Chief Economist Brian Coulton recently told CBS News. “They are still talking about how they will determine the ‘scope’ of additional policy tightening – whether additional tightening is needed or not.”

If you’ve been waiting to get a HELOC, it might be smart to act now before rates go back up

Other Benefits of HELOCs

Low interest rates aren’t the only thing that makes a home equity line of credit worthwhile. HELOCs also offer:

• Large Loan Amount: According to data from , the average American can borrow about $30,000 with a credit card Experian. HELOCs can allow you to borrow hundreds of thousands of dollars depending on your needs Credit score And Amount of home equity.
• Ability to borrow only what you need: Another popular home equity option, Home equity loan, you have to borrow a lump sum and you pay interest on the total amount borrowed. HELOCs give you a line of credit that you can draw from as needed, and you only pay interest on the amount you borrow.
• Late payment: With home equity loans, credit cards and personal loans, repayment begins as soon as the funds are received. HELOCs have two periods: a draw period (typically five to 10 years) and a repayment period (typically 10 to 20 years). It gives you some breathing room when things are tight.
• Tax Benefits: If you use your HELOC to make IRS-approved home repairs and improvements, interest may accrue except. “Home equity loan interest and lines of credit are deductible only when the borrowed funds are used to purchase, construct, or substantially improve the taxpayer’s home that secures the loan.” The IRS Says “the loan must be secured by the taxpayer’s principal home or second home (qualified residence) and meet other requirements.”

Ready to explore your HELOC options? Start here!

Bottom line

A HELOCs are an excellent option For homeowners who need access to funds at low interest rates.

That said, it’s important to understand that interest rates are not guaranteed to stay low for the duration of the loan. HELOC interest rates are generally variable, meaning they can increase or decrease over time. Although HELOCs typically come with a cap on the rate at which they grow, you need to make sure to understand the terms of any HELOC agreement so you understand what you’re getting into.