Home equity news: concerns over capital gains tax on home sales and the case for buying a newly built home
Interest rates roundup
HELOCs drop to three-month low; home equity rates hold steady
HELOC rates are the most affordable they've been in months. The average rate on a $30,000 home equity line of credit (HELOC) fell to 8.13 percent, while the $30,000 home equity loan held steady at 8.25 percent, according to Bankrate's national survey of lenders.
…while mortgage rates fall to last fall's levels
At 6.63 percent, the 30-year fixed-rate loan hasn't been this low since mid-October 2024, according Bankrate's latest national lender survey.
Could you fall off the capital gains cliff?
With equity stakes soaring, some longtime homeowners — especially those in high-cost real estate markets — are finding they could face capital gains taxes if they sell. This 'hidden home equity tax' is real, though it affects far fewer people than some hysterical headlines suggest. We debunk the myths and explain how to deal, should you be one of those likely to get a tax bite.
Learn more: Who's afraid of the hidden home equity tax?
Why new homes aren't as pricey as you might think
You've probably noticed newly built homes usually cost more than existing ones; that's been the norm for years. But lately, the price difference has gotten a lot smaller, especially in places like the South and West, where the supply of new builds has been creeping up. While construction costs and tariffs have bumped prices a bit, builders are offering some sweet financing deals that can make buying new a smarter choice.
Find out more: Is a new-construction home a better buy in today's market?
Mortgage denial decoded
In between high home prices and strict automated underwriting systems, getting a mortgage today can be tough: Less-than-sterling credit, high debt, small down payments, or even a recent job change can all be deal-breakers. Mortgage denials are increasing, in fact. But take heart: a rejection doesn't mean your homebuying dreams are over.
Profit from: Common reasons why mortgage applications get denied
Fix now, pay how?
When it comes to paying for big home improvements, you are probably debating: Should you tap savings or borrow with a HELOC or home equity loan? We weigh the pros and cons of both strategies, bolstered by some real-life testimonials, including from one of Bankrate's own.
Read up: What's the best way to pay for home renovations: savings or financing?
What's hot and what's not in the housing market
Despite high mortgage rates and affordability challenges, U.S. home prices continue to rise nationally, hitting a record median of $435,300 in June. But as we all know, real estate is all about location, location, location — and some formerly hot areas like Texas and Florida are actually seeing slight price declines.
Learn more: When are home prices going to fall — and how far?
Emergency repairs? Home equity to the rescue
Got a leaky roof, HVAC trouble, wiring issues, or foundation damage? If you've built up home equity, borrowing against it with a HELOC or home equity loan can help you cover costly emergencies. These options can be a lifesaver when savings or insurance don't cover the bill, but be sure to weigh the risks before borrowing.
Read more: How your home equity can pay for emergency repairs
7.2%
Increase in the total yearly originations of home equity lines of credit (HELOCs) and home equity loans in 2024
Source: Mortgage Bankers Association
In case you missed it
Technically, these stories were released in the previous weeks, but they're still worth highlighting.
How to borrow wisely from your home equity
If you own a home, tapping into your home equity with a loan or a HELOC can be a smart way to get some extra cash without incurring those crazy high credit card rates. Lots of people use it for things like fixing up their place, paying off debt, or handling unexpected bills. Here are eight reasons why it might make sense to borrow from your home's value.
Read on: 8 reasons to tap your home for cash: Expenses you can use home equity for
HELOC hangover after a bankruptcy
Ever wonder what happens to your HELOC if you go bankrupt? Whether you file Chapter 7 or Chapter 13, bankruptcy can give you relief, but not a free pass, especially if you still want to keep your home.
Learn more: How does bankruptcy affect your HELOC?
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