Home equity is the difference between your home’s market value and what you still owe on your mortgage. This equity can act as collateral for a home equity loan or home equity line of credit (HELOC). Both options provide funds to renovate your house, consolidate debt, and even pay college tuition. You receive a lump-sum upfront and make monthly repayments with a home equity loan. With a HELOC, you use funds as needed and repay as you use them. So is now the right time to get a home equity loan?
The Best Time for Home Equity Loans
In a third of all ZIP codes, more than half of properties are considered equity-rich. Median home value has increased 2%, setting a record high and increasing many homeowners’ equity. This means that now is one of the best times to consider a home equity loan or home equity line of credit. You may have the best home equity to date, and you could be approved for the best line of credit or loan because of it. But there may still be another option: refinancing.
Home Equity Line of Credit vs. Refinancing
Experts expect the housing market to moderate later this year, meaning equity will level off, too. If your home isn’t as equity-rich as you’d like, refinancing your home can shorten the length of your mortgage and provide lower interest rates. Refinancing also provides a very low interest rate compared to home equity loans and HELOCs. You can use the Horizon Mortgage Refinancing Calculator to explore this option further!
Home equity, lines of credit, and refinancing can be confusing. But your home is an investment, and you should leverage it! Contact the Horizon team to learn more about home equity loans.