Why you should get a home equity loan this March
It's early March, which means it's almost time for spring to roll around. The birds will soon be chirping, flowers will soon be blooming and house-cleaning projects are soon to be underway. And, the month of March is also a prime season for weddings, spring break vacations, home remodels and other potentially costly events.
Considering that the average homeowner has about $200,000 in tappable home equity, your house could open the door to the low-cost funding necessary to cover these costs. And, now may be the perfect time to tap into it.
Compare your home equity loan options now.
Why you should get a home equity loan this March
Here's why March may be the right time to tap into your home equity:
Rates have fallen from recent highs
While there may be closing costs and other fees to consider, interest charges are what account for the bulk of the costs of borrowing against your home equity. As such, most borrowers aim to get the lowest home equity loan rate possible.
The average home equity loan rate is about 8.66% right now — which is still higher than the rates that were offered in 2020 and 2021. However, it's lower than we've seen in recent months — and it's hard to predict if or when rates will drop in the near future. So, if you've been waiting for rates to fall before tapping into your home equity, this may be the time to act.
Find out how affordable your home equity loan could be today.
It could be the affordable borrowing option right now
There are lots of options for borrowing money, but other lending choices — like credit cards and personal loans — may come with higher rates compared to home equity loans. In fact, the average credit card interest rate is currently above 21%, making a home equity loan the more affordable option.
"These loans typically offer lower interest rates than other types of financing because they are secured by the home as collateral," explains Eileen Tu, vice president of product development for Rocket Mortgage.
Moreover, taking the home equity loan route could lead to lower monthly payments. That's because home equity loans also generally have longer repayment terms compared to other types of loans, and they offer fixed interest rates, which results in consistent monthly payments.
You may have pressing financial needs
There are several reasons it makes sense to take out a home equity loan. For example, you may need the money to make necessary home repairs or consolidate high-interest debt by using a loan with a lower rate. While not all home equity loan uses are time-sensitive, some are.
For example, if you need to make home repairs, the damage to your home could get worse if you wait. This, in turn, could mean you're paying more money for the repairs in the long run. Or, if you're facing expensive car repairs, medical bills or other expenses, it could mean you're pressed for time when it comes to borrowing. So, if you need to borrow money right now, taking out a home equity loan in March could make sense.
Use your home equity to access the money you need now.
The bottom line
Taking out a home equity loan this March could be the right move. Right now, home equity loan rates are lower than they were in recent months, and in today's high-rate environment, a home equity loan could come with a more competitive rate than other loan options, making it possible to borrow money affordably. Just make sure to shop around and find the best option for you before borrowing money to ensure that your home equity loan aligns with your financial needs and goals. Get started and compare your home equity loan options today.
