Thinking about updating your kitchen, finishing your basement, or tackling that long-awaited home remodel? With recent rate drops, this could be the perfect time to start.
Interest rates for Home Equity Lines of Credit (HELOCs) recently fell, making it more affordable for homeowners to tap into their home equity. Mortgage rates have also dipped to some of their lowest levels in a year—averaging around 6.13% for a 30-year fixed-rate loan.
Why Rates Are Falling
While mortgage rates aren’t directly tied to the Federal Reserve’s interest rate, they often move in the same direction. With the Fed expected to lower rates several more times this year, borrowing costs could continue to drop—good news for both homebuyers and current homeowners.
Lower rates can mean significant savings. Homeowners can borrow more affordably to fund renovations, cover major expenses, or refinance to lower their monthly payments.
How Federal Rate Cuts Affect HELOCs
HELOC rates aren’t set by the Federal Reserve, but they usually move in sync. When the Fed lowers its benchmark rate, HELOC interest rates tend to follow within a month or two—often reducing payments for current borrowers.
Because the Fed’s base rate also impacts credit cards, auto loans, and personal lines of credit, continued rate cuts could mean even more savings across the board. For Michigan homeowners and throughout the US, this makes a HELOC a flexible and attractive financing option.
How a HELOC Loan Works
A HELOC loan lets you borrow against the equity in your home. It functions like a revolving credit line—you borrow only what you need and pay interest only on the amount you use.
Your available credit is based on your home’s equity, which is the difference between its current value and what you owe. HELOCs generally offer lower interest rates than credit cards and include a draw period of five to ten years, followed by a repayment period of ten to twenty years.
Why Homeowners Choose a HELOC
A HELOC gives you flexibility—you can open one now and use it only when needed. Interest may also be tax-deductible when funds are used for qualified home improvements (consult your tax advisor).
Homeowners often use HELOCs to:
- Fund home renovations or improvements
- Pay for large expenses such as college tuition or medical costs
- Consolidate higher-interest debt
- Have a financial safety net for emergencies
Explore Home Equity Options with EB Mortgage
With interest rates trending downward, EB Mortgage helps homeowners make the most of their home equity. Whether you’re planning a major renovation or looking for added financial flexibility, now is an excellent time to review your lending options and get pre-approved.
The loan process can be complex, but our experienced consultants make it simple. We’ll guide you through every step—from understanding your options to closing your loan—so you can move forward with confidence.
Contact EB Mortgage for your pre-approval today!
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EB Mortgage is a locally owned mortgage company with experts in new home purchase, refinancing, and commercial loans. Our wholesale rates can’t be beaten. We offer more products, more options, and more solutions. Our “3C” Process is simple: complete our pre-approval request, consider options based on your requirements, and choose the offer that suits your needs best. Call us or e-mail us today!
Written by the Digital Marketing Team at Creative Programs & Systems: https://www.cpsmi.com/.