High Interest Rates

As 30-year fixed interest rates have stubbornly stayed in the mid-6s, many clients have been reluctant to refinance to tap into their home equity to consolidate debt, renovate their homes, or pay for college. Although many economists predicted 30-year fixed rates would be in the mid-5s at the end of 2024, it has not happened, and there is no certainty that we will see those numbers in 2025.

Home Equity Loan

So, if you have been putting off a home improvement project, accumulated credit card debt, or need a source of funds to pay for college or other significant expenses, it may be time to consider a home equity loan. A home equity loan, also known as a second mortgage, is a debt secured by your home. Generally, lenders will let you borrow up to 80% of the equity.

With a home equity loan, you receive a lump sum of money. These loans typically have a fixed interest rate and terms of up to 30 years. The interest rate you pay will be determined by loan to value, credit score, and loan amount. Generally, rates on second mortgages are 8 to 9%

Consider Your Options

While 8 to 9% may seem high, compared to carrying debt on credit cards at 15 to 20%, it is a reasonable option to consider. If you would like to learn more, please contact me.