Homeowners are Sitting on Record Equity, So Here’s How to Cash Out When Mortgage Rates are Rising
During the last year, home prices rose, making many Americans house rich.
By the end of the third quarter, borrowers had a record $9.4 trillion in tappable home equity collectively, or an average of $178,000 per borrower, says Black Knight.
When tapping those dollars, it’s best to consider your whole financial picture, including current debt amount and associated interest rates, how much you’re looking to borrow, available HELOC vs. cash-out rate offerings, and the timeline for paying off the additional debt.
But with 24% of all first-lien mortgages with an interest rate below 3%, cash-out refinancing gets less attractive because many borrowers would have to refinance to a higher rate than they currently have because interest rates are ticking up.
Bottom Line: If you are thinking about cashing out on your home equity, do it NOW!
Call/text 843-900-0155 or email alan@alandonald.com to get an accurate estimate of your current home equity.
