Hello Friends, With tax season having con clud ed, now is a good time to check in and see if your current mortgages are optimal for your situation. Home Equity Lines of Credit, or HELOCs, no longer provide for a tax benefit because the new tax laws took away the interest deduction for HELOCs. Despite the recent uptick in mortgage interest rates, many home owners still need to tap the equity in their homes for a number of reasons and HELOCs are not as attractive an option due to the changes in the tax code as well as the fact that HELOC interest rates are directly connected to the Prime Rate, which moves every time the Federal Reserve increases their target rate.
Remember that the only consumer interest rate that is directly affected by the Fed is Prime and Prime is always 3% higher than the Fed Funds, which is the rate of interest the will be in .25% increments. This I am working means the Prime Rate could be with many home as high as 5.5% by the end of owners who need
- cash for home improvements, debt HELOCs will feel these rate consolidation, college increases directly, while fixed tuition, relationship rate mortgages will not feel as separations, and direct an effect immediately purchasing other real after each rate hike. Eventually, estate through firstfixedrate and adjustablerate mortgage, cash-out mortgages all follow the Fed refinances to achieve Funds. Right now, mortgage these goals. rates are still relatively low from a historical perspective. The average on 30-year fixed rates over the past 30 years has been around 8.5% and we are still hovering around 4.5% APR.
I am working with many home owners who need cash for home improvements, debt consolidation, college tuition, relationship separations, and purchasing other real estate through firstmortgage, cashout refinances to achieve these goals. Property prices in California are still at lofty levels and many home owners have enough equity in their properties that can be tapped in a first mortgage, cash–out refinance now.
With rates moving up, we will see a slowing in property value appreciation and may even see home values decrease in the coming years. Despite the mortgage rate increases, a cashout refinance may be the best solution to many home owners’ needs.
Feel free to reach out to me for a free mortgage checkup to see if your mortgage is working for your needs.