Take Advantage of your Home’s Equity while Values are at an All-Time High

Mortgage News - Take Advantage of your Home’s Equity while Values are at an All-Time High

Interest rates continue to rise. Rates are higher than they've been in the past 12 years. For the first time in more than a decade, mortgage rates hit 5 percent. To help paint a picture a little better – 

At the start of the year, a 30-month fixed monthly payment on a $700,000 home with a 20% down payment was $2,394. Today, that same mortgage will cost $3,044 per month.

It’s often said that in the housing market, consumers don't buy the home price, they buy the monthly payment. That payment is at a new high since the start of the Covid-19 pandemic.

But there’s a light at the end of the tunnel. Home values across the country are at an all-time high making this the best time to do a Home Equity Line of Credit. HELOCs can help you utilize your home’s equity while its value is at an all-time high. Once initiated, you can use these funds to pay off credit card debt as well as high-interest loans, home renovations/upgrades, and put money away for a rainy day. This opportunity does not come around often so if a HELOC is of interest to you, take advantage of quickly gaining equity and utilizing it for your good with this product.   


Is it Time to Spring Clean Your Personal Finances?

The change in seasons is always a great reminder to check in on your financial health. Especially if you received a big tax refund, now might be an optimal time to assess your finances and put any disposable funds to good use. Check out these tips to spring clean your personal finances and build toward greater financial independence:

  • Stay on top of your credit - Checking your credit score is one of the most important ways to stay on top of your financial well-being. Not only does knowing your credit score ensures you’re always prepared if and when you need financing, but you’ll also be able to see if there’s been any new inquiries made in your name without your knowledge, debts gone into collection, and your debt to income ratio. All of these aspects contribute heavily to your financial wellness and buying power.
  • Fund your retirement - It’s a well-known fact that most Americans aren’t saving enough to fully fund their retirement. Get ahead of the curve and start or increase retirement savings now. No matter if it’s an IRA, employer-sponsored 401(k), or Roth savings plan, every little bit helps. And, don’t forget that pre-tax retirement contributions can help decrease your overall income tax liability. The benefits of retirement savings are truly endless.
  • Pay down debt - If you’re able to put extra money toward debt repayment, do it! Keep your debts low and stay on top of payment due dates to avoid late charges and extra fees. This might also be a good time to double-check recurring payments and subscriptions like streaming services, gym memberships, and other services you may have stopped using and no longer need. These costs add up and could be put to more productive use.
  • Build your emergency fund - Life comes at you fast and you never want to be caught without a safety net. Be intentional about saving for a rainy day - your future self will thank you!

Interest rates are on the rise – so what?

Interest rates are on the rise – so what?

As we enter year three of the Covid-19 pandemic, the United States has begun scaling down its emergency economic support. One key component of this effort is rise of interest rates.

Interest rates impact the way we spend and save money. Rates were set at a historically low level in 2021 as a way to encourage consumer spending. But with increased demand and global supply shortages, we’ve seen a significant rise in inflation. So the government is taking action. Higher interest rates is one way they’re responding to slow the rate of inflation. Thus, the recent rise in interest rates could be the first of many spikes we see this year.

Such a rise could signify a return to pre-pandemic mortgage rates. This will affect the amount of house you can afford as well as how much money you can take out of your home’s equity. Hikes in mortgage rates can also impact the future value of your home. As rates continue to rise, there will begin to be more inventory to choose from because fewer people will be able to qualify -- which means houses will sit on the market longer and prices will begin to drop. 

As mortgage rates increase, what does it mean for me?

Now, it is even more important to keep your credit in order. The better your credit, the better rate you will qualify for. You should maintain all open credit on time, keep inquiries to a minimum, and keep all balances at a maximum of 33% of the credit limit.

If you’re currently debating lowering your current loan rate, term, or acquiring money out of your home, now is the time to do so.



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