Federal Reserve Chairman Jerome Powell’s hawkish speech at Jackson Hole last Friday sent the Dow Jones Industrial Average spiraling down over 1,000 points on Friday. The slide continued on Monday, but the movement wasn’t quite as dramatic as last week.
The market is coming to grips with the fact the Fed means business on reducing inflation. Mortgage rates reacted on Monday by jumping to 5.95%* for a 30-year fixed. Let’s give the market a few days to absorb the tough medicine and rates could start to moderate after digesting the latest from the Fed.
Time to HELOC?
The average American homeowner is sitting on about $185,000 of home equity. That’s just one of the reasons that home equity lines of credit are booming right now. A Home Equity Line of Credit (HELOC)** is a personalized line of credit based on a percentage of your home equity that lets you borrow the money you need, when you need it, and then pay it back with interest.
That extra cash could come in handy for home renovations, paying down high-interest credit cards, or college tuition. HELOCs with a fixed interest rate are a popular option because they help keep your payments predictable. Most homeowners tend to avoid variable-rate HELOCs since interest rates are prone to volatile changes and a variable rate will be impacted by market conditions.
First-time homebuyers guide: part 8
Buying a new home is one of life’s biggest and most important decisions. Not only is it important that you find the right mortgage product to match your specific needs, you also want the right person to guide you through the process. As you shop for a home loan with a low rate and full transparency, you should also shop for a loan officer who demonstrates knowledge, friendliness and patience.
Pre-Approval
in 10 minutes?
in under 10 minutes. Grab a few important documents to get started.
- Tax Returns
- Copies of W-2s (or 1099s for independent contractors,
freelancers and the self-employed) - A payroll stub
- A bank statement
- Loan obligation info (student loans,
auto loans and credit cards)
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
* National average rates as of 8/29/22 are not advertised rates from Guaranteed Rate and are used for informational purposes only.
** Guaranteed Rate Inc. home equity line of credit (HELOC) is an open-end product where the full loan amount (minus the origination fee) will be 100% drawn at the time of origination. The initial amount funded at origination will be based on a fixed rate; however, this product contains an additional draw feature. As the borrower repays the balance on the line, the borrower may make additional draws during the draw period. If the borrower elects to make an additional draw, the interest rate for that draw will be set as of the date of the draw and will be based on an Index, which is the Prime Rate published in the Wall Street Journal for the calendar month preceding the date of the additional draw, plus a fixed margin. Accordingly, the fixed rate for any additional draw may be higher than the fixed rate for the initial draw. This product is currently not offered in the states of New York, Utah, Kentucky, South Carolina, Hawaii, Texas, West Virginia, Delaware and Maryland. The HELOC requires you to pledge your home as collateral, and you could lose your home if you fail to repay. Borrowers must meet minimum lender requirements in order to be eligible for financing. Available for primary, second homes and investment properties only. Dependent on minimum credit score and debt-to-income requirements. Occupancy status, lien position and credit score are all factors to determine your rate and max available loan amount. Not all applicants will be approved. Applicants subject to credit and underwriting approval. Contact Guaranteed Rate for more information and to discuss your individual circumstances. Restrictions Apply.
John Kistner is Guaranteed Rate’s Market Analyst. Market Updates are designed to provide readers with a high-level yet insightful view of how economic news, events and trends affect mortgage rates and the homebuying process.