Mortgage rates are finally taking a long overdue breather. In 2022, home loan rates were caught in a tug-of-war between high inflation and the Federal Reserve’s actions to limit it. Now pulling back from the Fed’s rate-hiking campaign, mortgage rates are on a path to a new normal. MBA’s March 2023 Mortgage Finance Forecast puts the 30-year fixed rate at 6.4% in the first quarter of 2023, gradually falling to 5.3% by year-end1.
Looking ahead through 2023, with mortgage rates still above 5%, it continues to make sense to take advantage of HELOCs since they allow homeowners to tap into their home equity without altering their primary mortgage.
HELOCs remain a smart option
Although mortgage rates have slowed, they remain relatively high. Homeowners no longer want to refinance their entire mortgage to access their equity. HELOCs allow them to borrow smaller amounts when they need it—keeping monthly payments lower and helping avoid unnecessary debt.
At the end of 2022, the average HELOC rate was at 7.62%. According to experts, that number is expected to reach 8.25% by the end of 20232. Although this rate is rising, HELOCs have much lower rates and initial costs than alternative options such as many credit cards at 20%3 or personal loans, which makes them attractive for debt consolidation or ongoing projects.
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In today’s market, lenders, servicers, and investors are increasingly concerned with navigating complex regulatory compliance requirements. It is important for lenders to leverage tech-backed services to help homebuyers explore home equity options. Timely, cost-effective, and more accurate property pricing estimates are an important part of any institution’s strategy to minimize risk in residential markets. But getting it right is still the most important. With geniusprice, provided by homegenius Real Estate, professionals can estimate a home’s price using homegeniusIQ—a proprietary artificial intelligence, image recognition, and computer vision technology.
Take advantage of the speed, accuracy, and productivity that come with our holistic suite of lending solutions and be sure to download our infographic and see how an end-to-end solution can help you relieve stress and boost productivity.
2 https://www.bankrate.com/home-equity/home-equity-rates-forecast/
3 https://www.federalreserve.gov/releases/g19/current/