Why You Shouldn’t Wait to Use Your Home Equity

As a homeowner, the equity you build in your home can be a valuable asset in your time of need. Whether you are looking to start one Home renovation or as you need Consolidate existing high-interest loansHome equity loans and lines of credit offer low-rate options for accessing the money you need

but Increase in interest rates And as economic uncertainty increases, borrowing any money will only become more expensive. Now may be a good time to use the equity you’ve built up in your home, especially if your home’s value has increased over the past few years thanks to the housing market. with high-interest personal loan or alternatively credit card, Home equity loan And Home Equity Lines of Credit (HELOCs) Offering competitive rates in today’s market.

Compare the top home equity rates you can qualify for right now and learn more.

Why You Shouldn’t Wait to Use Your Home Equity

If you are considering your use Home is equalIt may pay to start exploring your options, or you may wait longer for rates to drop.

Interest rates are rising

There is a number individual cause You go into the home equity rate you qualify for — your credit score, current debt, the lender you choose, and more — but the overall economic environment also plays a role.

Just this week, The Federal Reserve has raised interest rates For the tenth time since last March, his target is keeping the federal funds rate range at 5.00 – 5.25%. Home equity rates These are tied to the federal rate, which is why they move as the Fed changes. And another Fed rate hike means banks won’t hold back on charging higher interest rates on loans and lines of credit they offer, including home equity.

If you’ve already locked in a home equity loan, you probably already have one one price That is unlikely to change. But if you’re still thinking about opening one, locking in a fixed interest rate today can help you avoid higher rates.

Learn more about your home equity loan rate options today.

Rates can be high

Not only are rates rising, there’s little indication they’re going to drop anytime soon.

A press conference After the Fed’s rate announcement, Fed Chairman Jerome Powell said the Fed would consider ongoing rate moves in the coming months and did not rule out the possibility of raising rates further or holding them where they are. “We will make that determination meeting based on the totality of incoming data and their implications for the outlook for economic activity and inflation,” Powell said. “And we stand ready to do more if greater monetary policy moderation is warranted.”

As a result, borrowing costs are unlikely to come down anytime soon. If you’re considering using your home equity to borrow for a home project or other purpose, it may pay to start comparing your options for ones you may qualify for sooner rather than later.

Home Equity Loan vs. HELOC

If you’re thinking about tapping into your home equity, one thing to consider is whether a home equity loan or a home equity line of credit (HELOC) is a better fit for your goals.

If you choose a home equity loan, you can lock in a fixed rate today and get a lump sum for the amount you qualify for, which you pay back in monthly installments. If you want to use your loan for a specific purpose and want to know how much you’ll need, locking in a rate now can be a good option. Plus, when rates eventually go down, you can refinance at a lower rate

on the other hand, HELOCs There are variable interest rates, which may change over time. In the short term, this means your interest rate could be higher. But in the long run, an adjustable interest rate can lower your payments when rates eventually go back down. This can be a good option if you want the ability to access a line of credit but only pay back the amount you borrow from it.

Bottom line

Home equity loans and HELOCs both offer great alternatives to high-interest lending products like credit cards, even with rising rates. If you’ve been considering using your home equity to improve the value of your home through a renovation or remodel or even debt consolidation, this is still a great time to do so.

Start exploring today’s top home equity rates to see what you may qualify for.