Is the price of your home still high? Now this work

News this week that The Federal Reserve is raising interest rates again May not come as a surprise but this is still bad news for scores of home owners and those looking to buy a home soon. A spike in rates – the tenth since March 2022 – would likely raise mortgage interest rates again This will push refinancing further out of reach for millions of homeowners.

The long-term impact on the real estate market as a whole is, however, uncertain. Previous interest rate hikes have had mixed results. Some home prices fell last year while home prices in other parts of the country held steady or even rose. If you’re a homeowner in that last category you might want to consider your usage Home is equal Now before the interest rate environment potentially changes the overall value of your home.

You can explore your home equity loan options here to learn more.

Why You Should Use Home Equity Before Prices Drop

No one knows for sure where the housing market will be by the end of the year. U.S. home sales fell in March, evidence showed A light start to the spring home buying season. And the national median home price fell 0.9% since last March, landing at $375,000, according to the National Association of Realtors.

That doesn’t mean homeowners aren’t still sitting on a significant amount of home equity. They are. Home prices rose in 40 major cities earlier this year. But there is no evidence that they will remain high for long, especially in today’s rate environment. So it makes sense Tap the home equity you’ve just accumulated Before the price drops and the amount you can withdraw is quite small.

Home equity, after all, is not determined by how much you have paid for your mortgage balance. It also includes the current value of your home in the market. For example, let’s say you initially had a $500,000 mortgage. You have since paid off $100,000 of the policy but your home is worth $600,000. In this example, you would have $200,000 worth of equity to play with ($100,000 down payment + $100,000 home appraisal).

That said, since rising rates can cause home prices to fall, you’re left with more withdrawals than you would have been a few months ago. So if additional money is needed for financing repairWhether it’s a big expense or something else, you should strongly consider using your home equity while it’s still high.

Explore home equity options here now.

How to use your home equity now

There are several ways to use your home equity while your home value is still high Here are two to know:

Home Equity Loan: Home equity loan Allows you to withdraw a lump sum of cash from the equity you have accumulated in your home. Home equity loan interest rates Usually less than what is available with a personal loan or credit card. And the rates are fixed, allowing the homeowner to budget accurately each month Learn more about home equity loans.

HELOCs: HELOCs, or home equity lines of credit, also allows the homeowner to withdraw from their home equity, albeit through a revolving line of credit. HELOCs work more like credit cards than home equity loans. They also have less interest rate Compared to some other credit options, but HELOC rates are generally adjustable so if you want to get a lower rate – and keep it low – a home equity loan may be better for you. Learn more about HELOCs.

Bottom line

No one knows for sure which way interest rates are going. Although home prices remain consistent or even jump in some parts of the country, the rate environment does not allow this to continue. In this case, homeowners who need extra cash may want to act now so they can get more with a home equity loan, or HELOC. If they wait, and home values ​​decline, they will have fewer financial options to pursue.