3 tips for getting the best HELOC rate this March
Home equity line of credit (HELOC) rates are lower now than they were when they hit two-year lows in February, averaging 8.04% this week. Low rates on HELOCs make them a more affordable option than home equity loans, personal loans and credit cards. In fact, this week's average HELOC rate is nearly three times lower than the average rate on credit cards.
Not only are rates low, but home equity levels remain high. A recent report shows that the average homeowner has $313,000 of equity built up in their house.
High equity amounts and low rates make the borrowing environment beneficial for homeowners. HELOCs are a great option to tap that equity — as a line of credit, they allow you to borrow as needed, up to your limit, and, in most cases, make interest-only payments during their draw period. HELOCs also use a variable interest rate, which is an advantage when rates are low like they are now.
If you're ready to open a HELOC this March, it helps to know how to find the best rate now. Below, we'll detail what to know.
See how low your HELOC rate could be here.
Three tips for getting the best HELOC rate this March
Ready to get started with a HELOC now that rates are steadily declining? Here's how to get the best HELOC rate this month:
Pay down low debt balances that have high monthly payments
Debt-to-income ratios (DTIs) are one of the main reasons borrowers aren't able to get the best HELOC rate or, in some cases, get a HELOC at all, says Nathan Young, founder of mortgage lender North Star Mortgage Network.
To help borrowers improve their DTI, one of Young's primary strategies is to identify their lowest debt balances that have the highest monthly payments. Eliminating one or two of those balances removes those monthly payments from your DTI calculation and can help you get a better HELOC rate.
"Focusing on the largest payment with smallest balance … not only helps their credit score but their debt to income ratio," Young says.
While the change to your credit score may only be a few points, Young says, those few points may help carry you to a lower rate.
Explore your HELOC options online now.
Work with a local mortgage broker
Young points out that mortgage brokers work with a network of mortgage wholesale companies that can offer HELOCs at competitive rates, depending on your credit history, DTI and other factors. His company can search HELOCs from 55 different companies, he says. Having that wide range of wholesalers at his disposal helps him find the best rates for clients.
Additionally, he notes, local mortgage brokers may have close connections with underwriters and other key people in the HELOC process that can help solve application and rate issues quicker than if you went through a bigger company and, in some cases, lead to lower rates.
Not only can a local mortgage broker potentially help you quickly resolve issues that block your path to a better rate, but commission percentages at local brokerages may be lower than bigger institutions, which allows a local shop to offer a lower HELOC rate.
Look for lenders that offer lower rates for interest-plus-principal payments or shorter draw periods
HELOCs are split into a draw and a repayment periods. Typically, you make interest-only payments during your draw period. However, some lenders may offer you a lower HELOC rate if you make interest-plus-principal payments on what you borrow during your draw period or choose a HELOC with shorter draw and repayment periods. In both cases, the lender offers lower rates because they're reducing their risk by getting more money back in a shorter amount of time than if you made interest-only payments over a longer draw period.
The bottom line
Finding the lowest HELOC rates this March will take some work on your part but will be worth it if you can secure a competitive interest rate. A lower interest rate will result in lower interest-only payments during your draw and repayment periods, reducing the chance that you could go into default. If that happens, you may lose your home since you usually have to offer your house as collateral to get a HELOC. So it's important to shop around to find the best rates and terms for your financial needs first.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
8 hours ago
- Yahoo
Senator Young asks SEC to protect U.S. from 'Chinese market manipulation'
HENDERSON, Ky. (WEHT) – U.S. Senator Todd Young sent a letter to Securities and Exchange Commission (SEC) Chair Paul Atkins outlining concerns related to the Chinese Communist Party's (CCP) 'manipulation' of global financial markets and 'evasion' of U.S. financial regulators. Sen. Young says the letter also encourages the SEC to consider additional steps to protect American markets, shareholders and the country's economic and national security. IN Department of Health celebrates decrease in infant mortality rate Senator Young writes, 'As you get settled in your new role, I write to express my concern with the continued risk that Chinese companies traded in U.S. exchanges pose to American investors and fiduciaries. I encourage the SEC to explore additional options to protect American economic and national security interests from these companies. Despite their presence on stock exchanges in the United States, these corporations are marked by a chronic—and often intentional—lack of transparency; poor corporate governance or even fraudulent behaviors and the constant threat of arbitrary or spurious enforcement actions by Chinese regulators. Moreover, the Chinese corporations lack incentives to disclose their business practices because the enforcement measures available to U.S. regulators pale in comparison to the punitive threats posed by Chinese agencies.' USPS audit sheds light on Evansville mail delays Sen. Young says American investors, fiduciaries and publicly-traded firms with operations, supply chains and business arrangements in both mainland China and Hong Kong often experience a lack of transparency, fraudulent behaviors and arbitrary threats at the hands of the CCP. Without proper protections in place, malign CCP actions are a risk to American investors and firms as well as the country's economic and national security. The letter can be viewed below. 20250519-Letter-to-SEC-Chair-Atkins-on-Chinese-Public-CompaniesDownload 'Eyewitness News. Everywhere you are.' Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
CBS News
19 hours ago
- CBS News
When should retirees choose a HELOC over a reverse mortgage? Experts weigh in
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Retirees should closely compare their HELOC and reverse mortgage options before borrowing any equity from their home. Shkljoc/Getty Images Retirees are increasingly exploring home equity as a tool to manage their rising costs. While inflation affects all of us, retirees are particularly vulnerable to its effects because of their fixed incomes. However, because many seniors are homeowners, using home equity products could help them tap into their biggest asset. "Many retirees purchased their homes for significantly less than the current value and can enjoy the fruits of this value appreciation to be more comfortable in their later years," says Sarah DeFlorio, Vice President of Mortgage Banking at William Raveis Mortgage. Home equity lines of credit (HELOCs) and reverse mortgages are two popular home equity products, but they work very differently and are properly suited to different situations. If you're a current retiree or plan to retire soon and you own your own home, the below guide could help you choose the best lending tool for you. See how much equity you could borrow with a HELOC here. When should retirees choose a HELOC over a reverse mortgage? While every retiree has different financial circumstances, there are some broad guidelines for when each of these products may be more advantageous. Here's what to consider: When to consider a HELOC A HELOC functions as a revolving line of credit taken from your home equity. Similar to a credit card, you can use your HELOC as often and as many times as you want, as long as you're within your credit limit. The easy access to cash and the ability to draw again and again makes a HELOC a good option for both one-time and ongoing expenses, as long as you're able to repay the balance. And because you'll have to repay the HELOC by the end of the repayment period (often a 10- to 20-year period that follows a 10-year draw period), it's a good option for retirees who are only looking for a temporary cash solution. "It's ideal if you need to fund a one-time project like a home upgrade, want to consolidate high-interest debt and pay it off on a timeline, plan to sell or downsize in the next few years, or want to preserve home value for heirs," says Michael Brennan, President at Nationwide Mortgage Bankers. "It also works well when you have other assets and just need a liquidity bridge." Explore your current HELOC rates and offers here to learn more. When to consider a reverse mortgage Unlike a HELOC, a reverse mortgage serves as a longer-term solution. You can pull money from your home, often in a single lump sum or a series of payments. Then, you won't have to repay the loan until the primary borrower either dies or sells the home. The nature of reverse mortgages makes them an option for retirees who need to borrow money they won't have to repay, at least not while they're still in the home. For example, if a retiree doesn't have sufficient savings and needs an influx of cash each month to help cover their bills, a reverse mortgage could be the answer. For example, let's say you've retired with less money than you hoped and don't have the option of bringing in additional income. You could get monthly payments from your reverse mortgage to help cover your budget shortfall. As you receive payments, your loan balance rises — it's the exact opposite of a traditional mortgage. And in most cases, you (or your heirs, after your death) would use the proceeds of your home sale to repay the loan. "It can offer predictable monthly payments or lump-sum cash to handle those rising costs without draining your 401(k) or IRA," says Brennan. It's worth noting, however, that reverse mortgages are are limited to homeowners 62 years or older. If you're a younger retiree and need to tap into your home equity, you'll have to explore other alternatives. Learn more about your reverse mortgage options here. HELOC vs. reverse mortgage: Which is right for you? When choosing between a HELOC and a reverse mortgage, it's important to consider what you need the money for and how long you need it. If you need the money for a one-off expense, a HELOC is often a good option. But if you're looking for an option to help cover your monthly expenses, a reverse mortgage may be a better fit. Similarly, the timeline is key. You'll have to pay back a HELOC by the end of the repayment period, which could be between 20 and 30 years after you open it. Meanwhile, you won't have to repay a reverse mortgage until you leave the home (or your heirs repay it on your behalf after you die). Therefore, if you can't swing the monthly payments on a HELOC, a reverse mortgage may be your only option. It's important to consider whether you hope to leave your home to your loved ones. When you borrow from a HELOC, you'll eventually repay the balance, meaning you'll restore your equity in the home. But with a reverse mortgage, you typically don't pay it back while you're living in the home. Therefore, in the event of your death, your heirs may be forced to sell your home to repay the balance. And because the loan accrues interest the entire time, the balance continuously rises. By the time the house is sold, there may not be any money left for your loved ones to inherit after the loan has been repaid. Finally, as with any other lending product, make sure you understand the cost and terms. Both HELOCs and reverse mortgages are a bit more complex than your standard installment loan, and both will have applicable fees and interest. "While reverse mortgages can provide needed cash flow for some retirees, particularly those on a fixed income, they've also developed a reputation for high fees, complex terms, and aggressive marketing, raising concerns about whether borrowers fully understand what they're signing up for," says Sean Briscoe, the Director of Products and Payments at Alliant Credit Union. "In contrast, HELOCs are more transparent, with straightforward repayment terms and fewer surprises." In either case, don't commit until you have a clear understanding of what you're borrowing and why, as well as your responsibilities as the borrower. The bottom line Tapping into your home equity can be a great way to get an influx of cash as a retiree, and HELOCs and reverse mortgages are two solutions to help you do that. However, neither of these solutions is right for every retiree, and it's important to analyze your unique situation to determine the optimal fit. If you aren't sure which direction to go, a financial planner or another knowledgeable professional can take a holistic look at your personal finances to advise you on the best option.
Yahoo
19 hours ago
- Yahoo
Home Hardware Strengthens Support to Canadian Farmers with New Product Assortment
ST. JACOBS, ON, June 10, 2025 /CNW/ - In response to a current gap in farm product availability in Canada, Home Hardware Stores Limited is stepping up to support agricultural communities across the country. Recognizing the vital role farmers play in communities from coast to coast, Home Hardware Stores Limited is dedicated to providing additional access to products such as livestock feed, equipment, tools and essential supplies. Home currently offers a variety of items available in the farming category and will be introducing a significant number of additional products to the assortment, ensuring that Canadian farmers have reliable access to the resources they need to succeed. Home is launching a Farm Assortment Catalogue on June 19, 2025 to highlight existing agricultural products, as well as new items being added to the lineup. Home has been hard at work to source the best farm items in the country which range from livestock feed, stall mats, fencing, feed pans, buckets, welding wire, farming attire and more. In addition to this, Home's eCommerce team has added a Farming Supplies page to the website to ensure products are accessible to Canadian farmers shopping online. "Our teams have been working with rural Home Dealers and suppliers to identify the current gaps in the market," said Scott Bennett, Director of Merchandise Strategy & Execution, Home Hardware Stores Limited. "The expanded farm assortment complements the other products we offer at our Home stores including housewares, power tools, welding and more. Our goal is to ensure Canadians have access to the tools they need to sustain their communities for the long term." Through an expanded product selection and deeper engagement with local agricultural communities, Home is delivering expert service, advice, and quality products, reinforcing its commitment to serve customers from coast to coast. About Home Hardware Stores Limited Founded 60 years ago in St. Jacobs, Ontario, Home Hardware Stores Limited is proudly Canadian and the country's largest Dealer-owned and operated home improvement retailer with more than 1,000 stores operating under the Home Hardware, Home Building Centre, Home Hardware Building Centre and Home Furniture banners. The Home Hardware Dealer network improves life at home by providing superior home improvement retail experiences through helpful advice and a deep understanding of the communities they serve. Home Hardware Stores Limited is designated as one of Canada's Best Managed Companies and recognized as one of Canada's Best Employers. More information about the company is available at SOURCE Home Hardware Stores Limited View original content to download multimedia: Sign in to access your portfolio
