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The start of a new month is always a good time to review your financial situation. And with inflation stubborn (but significantly reduced) i interest rate still high, this June is an important time to take stock of what is working and what is not, and to take steps to improve the latter. With significantly high rates for personal loans and credit cards (both averaging double digits), many homeowners may choose to use their home heritage However.
Both of us home equity loans i home equity lines of credit (HELOC) Come with rates less than 10% for qualified borrowers right now. However, as with all loan options, they should be used strategically for maximum benefit. And the timing will have to be right to achieve specific financial goals. To that end, there are certain smart home value moves that homeowners should make if they're considering tapping into their home equity this June. We'll break down three of them below.
Get started by seeing what home equity loan interest rate you could secure here today.
3 smart home value moves to make this June
Home equity loans and HELOCs offer homeowners specific advantages in today's unique economic climate. Here's how they can take advantage of these benefits heading into June:
Start shopping for lenders
When it comes to any loan product, it's up to borrowers to shop around for the lowest rates and best terms. This also applies to home equity borrowing. But it is especially important to do it in June. With the upcoming inflation report and the Fed's rate cut announcement both scheduled for release on June 12, the rate climate could swing in either direction by mid-month.
So it's important to shop around for lenders before this happens so you know which one to use if rates adjust in the coming weeks. Consider getting quotes from at least three different lenders now so you know which one is offering the best deal and which appears to be the best deal.
Start shopping online now for home equity lenders.
Secure a home equity loan rate
With inflation cooling significantly but still more than a full percentage point above the Federal Reserve's 2% target, there is now a compelling case for locking in a home equity loan rate . In this way, borrowers can protect themselves against any potential future rate hikes yet to come.
“Given the current economic landscape and the potential for interest rates to rise, locking in current lending rates may be a wise decision,” Ralph Adamo, CEO of ChFC and founder of Integrity Wealth Management, said recently. CBS News.
And remember that rate cuts are unlikely to happen until later in 2024 and are likely to be insignificant, reinforcing the upside of locking in a home equity loan rate this June.
Use it for home repairs and renovations
June and the summer months are often a popular time to complete home repairs and renovations. Some of these summer renovations it can significantly increase the value of your home, and your equity as well. And while you can pay for these projects in many ways, home equity debt is one of the best ways to do it.
This is because the interest you pay a home loan or HELOC may be tax deductible if used for eligible, IRS-approved housing projects. Compared to the interest you'll be stuck paying on personal loans and credit cards, it's clear that home equity debt is the best alternative to use for home repairs and renovations this June and beyond. .
Learn more about your home value options here.
The bottom line
If you've been thinking about tapping into your home equity, this June could be a smart time to do so. However, to reap the benefits of this type of single-month loan, homeowners should be sure to shop around for lenders, consider locking in a rate sooner rather than later, and use it for repairs and summer home renovations, which will allow them to deduct them. the interest they pay on their taxes next spring. Just make sure you carefully understand the pros and cons of the home loan, as your home serves as collateral in these scenarios, and you could lose it in the process if you don't pay back what you borrowed.
