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Why you should check home equity loan rates daily

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Multiple factors could tip home equity loan interest rates one way or the other right now. Getty Images

Interest rates are changing again. After a two-plus year period in which the Federal Reserve raised rates to their highest level in decades, the federal funds rate was finally reduced in September. And, last week, the Fed issued another cut in the form of 25 basis points, bringing its benchmark rate down to a range between 4.50% and 4.75%. Another Fed meeting scheduled for December is widely expected to end in another rate reduction for the same amount.

While not a great development for savers, these cuts will undoubtedly help borrowers, no matter the product they're currently using or plan to apply for in the short term. To get the most out of these items, however, it's critical to check rates daily, particularly if you're considering opening a home equity loan or home equity line of credit (HELOC). So you'll need to be proactive, especially in today's changing rate climate. Below, we'll explain why checking home equity loan rates daily is critical now — and how you can use this time to improve your chances of securing a cost-effective loan.

Start by seeing what home equity loan rate you're eligible for here.

Why you should check home equity loan rates daily

Simply put: The offers lenders provide borrowers on both home equity loans and HELOCs change each day, sometimes by a significant amount. 

If you're a prospective borrower and looking to obtain the cheapest loan, then, you could miss the opportunity to do so if you're not closely monitoring the rate climate each day. And while a few basis points one way or the other, on paper, may not seem to be critical, that difference can add up to hundreds if not thousands of dollars saved over time. Remember that repayment periods are often 10 or 15 years long. It's critical, then, to get the lowest rate you can find to make these payments as affordable as possible. 

But what if you already have a home equity loan or HELOC? Monitoring the rate climate is arguably just as important for you, if not more so. That's because today's cooling rates offer new opportunities to refinance, potentially saving you a significant amount of money in your monthly payments, especially if you took out a home equity loan or HELOC in recent years when the rate climate had surged. 

If you're one of these borrowers, now may be an opportune time to refinance. Just make sure to calculate the savings before acting, as you'll need to pay refinancing costs to secure the lower rate and that cost will need to be outweighed by the savings over time.

Start exploring your current home equity loan rate options online today.

What to do while waiting for home equity loan rates to drop

What if you're already a home equity loan borrower (or a potential one) but think it's worth delaying an application until rates come down further? While this could be a mistake (timing interest rate cuts or hikes is almost impossible to do), it could offer you an opportunity to focus on other factors that will inevitably come into consideration when you do formally apply — like your credit score.

Remember that lenders will offer the lowest rates and best terms to those homeowners with the highest credit scores and cleanest credit backgrounds. So, if you don't have both, waiting for rates to drop will be fruitless if you're not in a position to take advantage. Work on your credit now, then, to boost your score as high as possible. Ideally, by the time you're done doing this rates will have come down far enough that you can take action. 

The bottom line

Closely monitoring the rate climate is critical for borrowers, especially those who are accessing their home equity (or already have). So monitor the climate for timely opportunities to capitalize on a lower rate — and make sure you've done the work in advance so that you're a credit-worthy applicant. By taking both steps now, home equity users will best position themselves for success, both in the short term and over their full repayment period.

Learn more about your home equity borrowing options here.

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