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The latest HELOC rates, and 3 things you need to know about getting a HELOC now

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HELOC rates for loans with a 20-year repayment period now average 7.81%, up slightly from a week prior, but down from October. HELOCs with a 10-year repayment period also ticked up slightly to 5.95%, according to data from Bankrate for the week ending December 19. That said, the rates you get will depend on the equity you have in your home and your financial situation, and you can see the best HELOC rates you may qualify for here.

One of the major pros of a HELOC is that it tends to be one of the cheapest loans you can get — at least compared to personal loans or credit cards — thanks to the fact that these loans are secured by your home. That said, if you don’t pay the loan, you can lose your home.

And there are plenty of other things to consider about a HELOC as well, so we asked Dan Wallace, the general manager of lending at Figure Technologies, a financial services company valued at $3.2 billion dollars that handles HELOCs and mortgage purchases and refis, to share his thoughts on getting a HELOC now. 

1. High home values may mean more tappable equity.

Home values have also soared in recent years: The Case-Shiller US National Home Price Index rose by 18.6%  from 2020 to 2021 — the strongest year-long growth in the history of their data. And higher home values mean borrowers may be eligible to qualify for a larger HELOC, says Wallace, who notes that there’s “$11 trillion dollars in tappable equity.” See the best HELOC rates you may qualify for here.

2. But you may not qualify for a HELOC.

Wallace notes that while many properties like single family homes, townhouses and most condos are generally eligible for a HELOC, not all are. His firm, for example, doesn’t offer HELOCs on co-ops, commercially zoned real estate, multifamily real estate, manufactured housing, earth or dome homes, timeshares, log homes, houseboats or mixed use properties. What’s more, you typically must have a minimum credit score (680 for a Figure HELOC) to qualify, and enough equity in your home (usually 20% or more).

3. Your current mortgage rate won’t be affected.

“With current mortgage rates hovering at 7%, a HELOC allows borrowers to access the equity in their home and keep their existing low-cost mortgage in place by adding a new loan only for the additional amount they need to borrow, saving substantial interest costs,” says Wallace.

The advice, recommendations or rankings expressed in this article are those of MarketWatch Picks, and have not been reviewed or endorsed by our commercial partners.


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