How to take advantage of high home prices

After a decade of rising home prices across the U.S., home values ​​in some areas It started to stabilize earlier this year — but new data shows prices are rising again across the country.

Home prices rose for the third month in a row in March, with 92% of market prices across the country rising, according to Black Knight Monthly Mortgage Monitor. What’s more, 40% of markets have seen prices return to peak levels, the report shows.

Homeowners know that Home prices may fluctuate Over time, so it’s smart to take advantage of today’s high prices and add durability house price That can benefit you in the long run.

In fact, rather than constantly monitoring the ever-changing market values—which is not a healthy thing for any homeowner to worry about, says Charles H. Thomas III, CFP, founder and president of Intrepid Eagle Finance—“focus on the improvements to your home that improve the quality of life. And creates value in the long run.”

Here are a few ways you can take advantage of higher home prices to improve your home Long-term home value.

Explore your home equity options here now.

How to take advantage of high home prices

Whether you’re a longtime homeowner or you bought a home at the peak of the pandemic’s housing boom, there’s a good chance you’ll be living in one. appreciated in value Over the past few years. Even if you don’t want to sell your home in the near future, you can Tap on the value Your home to benefit from today’s home prices.

The tools below give you access to funds that you can put towards your home improvements — and potentially Benefits from tax deductions. But they can also be useful for improving your financial situation overall Debt consolidationPaying for college expenses or other things that are usually incurred High interest rates.

Here are some borrowing options that will allow you to tap into your increased home value today:

Home equity loan

Home equity loan Allows you to borrow against your home’s equity (its current market value minus the amount you still owe on your mortgage). Despite rising interest rates, home equity loans are often among the lowest-rate borrowing options available to homeowners—especially compared to double-digit personal loan or credit card rates that can exceed 20% APR. However, home equity loans are also secured by your home, which means it is very important Pay what you oweor risk foreclosure.

Lenders usually allow you to borrow up to 80% Your home equity and these loans carry fixed interest rates. This means that the rate you lock in today will be how much will be credited to your balance until it is paid in full. Home equity loans can be a good option for homeowners who want to lock in a rate before rates rise and have a plan to repay the entire balance.

Explore some of the best home equity loan rates available here now.

HELOC

Similar to home equity loans, Home Equity Lines of Credit (HELOCs) Allow you to borrow against the equity you have built up in your home. May depend on the line of credit you are approved for Various reasons But also your application Usually limited to about 80% Your home equity. Once you’re approved, you can choose how much of that line of credit you want to borrow Then, you’ll only pay back — and collect interest — the amount you actually borrowed

Also unlike home equity loans, HELOC rates are variable. As interest rates rise, this means you can charge higher rates. But if rates drop in the future and your HELOC rate drops too, you could pay less interest over the life of the loan. HELOCs can be a good option if you can account for rate volatility that can change your monthly payment over time.

Cash-out refinancing

A Cash-out refinancing Another way to tap into your home equity. With this option, you can refinance your mortgage and take the amount you’ve built up in equity as cash. The new loan amount will be larger — but instead of taking out a second loan, you’re simply replacing your original mortgage with a separate loan.

However, you may want to be careful before opting for this option today. Depending on how interest rates change over time, you could end up with a higher mortgage rate and pay more over the life of your loan. It can help to have a strong credit profile and know how much cash you need before you apply so you can limit the amount you borrow and make sure your new monthly payments are still affordable.

Check the refinancing rates you may qualify for today here.

Why take advantage of home prices now?

If you’re considering tapping into your home equity, doing so when home prices are high can be a big win. If you wait until House prices fallThe amount you can borrow may be significantly reduced.

Say your home is currently worth $500,000 and you owe $200,000 on your mortgage. Your available equity today is about $300,000. But maybe two years from now the market will change. If your home’s value adjusts to $450,000 and, during that time, you owe $180,000 on your mortgage, your equity will drop to $270,000, meaning you’ve lost $30,000 in equity even though you’ve made more payments on your mortgage during that time.

That’s why it can be convenient to tap into you Home is equal When the price is favorable. Using money to make lasting improvements — or improving your overall financial situation — can put you in a better financial position regardless of future market changes.

Start taking advantage of your home equity and compare today’s top rates.