Latest news with #MultiplyMortgage
CBS News
30-04-2025
- Business
- CBS News
Does today's rate environment make HELOCs too risky? Here's what experts say.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Homeowners should carefully calculate the trajectory of HELOC interest rates before borrowing equity right now. Getty Images Inflation and elevated interest rates continue to squeeze household budgets in 2025. Despite these financial hurdles, many homeowners are sitting on a valuable resource — the equity they've built in their homes. Getting a home equity line of credit (HELOC) has become a popular way to tap into this wealth. It offers lower interest rates than credit cards while providing flexibility similar to the use of a credit card. And that rate is variable and subject to change monthly for borrowers, meaning it could become even cheaper if interest rates continue to decline as they have. But the same features that make HELOCs attractive can also create financial risks. Are they too risky right now? We asked three home equity experts to share their insights on when HELOCs make sense, when they don't and what alternatives could be better right now. See how low your HELOC rate offers are here now. Does today's rate environment make HELOCs too risky? "With the prime rate at 7.5% and home prices having appreciated nationwide, I don't think HELOCs are too risky today," says Karen Mayfield, national head of originations at Multiply Mortgage, a mortgage-as-a-benefit provider. Debbie Calixto, sales manager at mortgage lender loanDepot, echoes a similar sentiment. "Households are feeling the pressure of rising living expenses," she observes. HELOCs offer a valuable alternative to high-interest credit card debt. However, Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad, offers a more nuanced view. "HELOCs aren't inherently too risky, but they come with risks that depend on [your] situation," he explains. While home equity loan interest rates have dipped below 9%, he cautions that variable HELOC rates can climb if economic conditions change. When HELOCs make financial sense now Glick says a HELOC makes the most sense if you find yourself in one or more of these situations now: Get started with a HELOC online today. When HELOCs may not make financial sense now Here are situations where a HELOC could cause more harm than good if secured now, experts say: You have unstable income: "If your job's shaky or your DTI is above 43%, a variable-rate HELOC could stretch you thin, especially if rates rise," cautions Glick. "If your job's shaky or your DTI is above 43%, a variable-rate HELOC could stretch you thin, especially if rates rise," cautions Glick. You lack a clear purpose: "If you're borrowing for vague reasons or lifestyle expenses [such as] vacations, you're setting yourself up for trouble," warns Glick. "If you're borrowing for vague reasons or lifestyle expenses [such as] vacations, you're setting yourself up for trouble," warns Glick. The housing market is declining: If local home prices are dropping, overborrowing could leave you underwater if you need to sell. If local home prices are dropping, overborrowing could leave you underwater if you need to sell. You're on a tight budget: A HELOC's variable rate is risky if you're on a fixed budget where a $200 monthly payment increase would hurt you, according to Glick. A HELOC's variable rate is risky if you're on a fixed budget where a $200 monthly payment increase would hurt you, according to Glick. You already owe a lot: "If [you owe] a substantial amount on [your] home, it can be risky maxing out [your] entire, or a bulk, of [your] home equity," Mayfield says. Alternative home equity borrowing options to consider If a HELOC doesn't work for your circumstances right now, experts recommend these alternatives: Home equity loans Cash-out refinance loans : This replaces your existing mortgage with a larger one. Calixto notes that "even if the new mortgage is a bit higher than your current one, your borrowing costs might still be lower when everything's combined." This replaces your existing mortgage with a larger one. Calixto notes that "even if the new mortgage is a bit higher than your current one, your borrowing costs might still be lower when everything's combined." Reverse mortgages : "For homeowners 62 [of age and up], this lets you borrow against equity without monthly payments (repaid when you sell or pass away)," explains Glick. Seniors with limited income may choose this option. The bottom line HELOCs offer flexible access to your home's equity. But they work well when you have a clear purpose, stable finances and a plan for managing variable payments. Calixto advises taking a conservative approach. "Borrow only what you truly need and think carefully about how your home's value might change over time," she says. With careful planning, a HELOC can be a powerful financial tool rather than a risky burden.
Yahoo
19-03-2025
- Business
- Yahoo
Multiply Mortgage Announces $23.5M Series A Funding to Introduce Lower-Rate Mortgages as a New Category of Employee Benefits
First-of-its-kind fintech offers employees up to 0.75% interest rate discounts and concierge-level support from mortgage experts DENVER, March 19, 2025--(BUSINESS WIRE)--Multiply Mortgage, the financial technology company making homeownership more accessible through employer benefits, today announced it has raised a $23.5 million Series A funding round, led by Kleiner Perkins. A*, Box Group, Mischief, and Workshop also participated, bringing the company's total funding to $27 million. As part of the announcement, Multiply also shared that its services are available for employers to offer to their employees as a benefit in 45 states and the District of Columbia. Employees from leading high-growth companies have been able to access more attractive rates and buy homes through Multiply. "Homeownership has become increasingly out of reach for many Americans, and we don't expect interest rates to fall to the levels we saw in 2020 ever again," said Michael White, CEO and co-founder, Multiply. "Our mission is to help employees – whether frontline workers or corporate staff – access lower mortgage rates and expert guidance, at zero cost to their employer." The mortgage industry presents homebuyers with a difficult choice: they can work with a low-cost, call-center lender that lacks personal support or choose a local lender or broker who may not offer the most competitive rates. This tradeoff creates unnecessary stress in the home buying process. Founded in 2022, Multiply is building an AI-native mortgage origination platform paired with expert mortgage advisors, eliminating this compromise by providing both competitive rates and concierge-level service. With rising healthcare costs, many HR teams are under pressure to provide competitive benefits without increasing expenses. Multiply's high-value, zero-cost solution enhances financial wellness, strengthens retention, and attracts talent – all without burdening employers. Its financial wellness offering provides mortgage interest rate discounts of up to 0.75% with an average annual savings of $5,100, unlimited guidance with expert advisors, and employee education sessions that cover the home purchase and financing process, all with zero cost or administrative overhead for the employer. With employer healthcare costs expected to rise by 9% in 2025, many HR leaders and benefits managers are less likely to offer ancillary benefits to employees due to limited budgets. Companies like Multiply that offer benefits at no cost to the employer are in a unique position as they can provide benefits that are attractive to employees without impacting an employer's bottom line. "Attracting and retaining top talent is a focus for every great company, and providing competitive benefits and compensation programs is table stakes. Multiply is pioneering a new employee benefits category by offering lower-rate mortgages as a benefit—a point of differentiation for employers looking to stay competitive in the talent market," said Mamoon Hamid, Partner at Kleiner Perkins. Traditional mortgage lenders are burdened with high customer acquisition costs and human labor-intensive origination. Multiply partners directly with employers to offer mortgages as a benefit, and Multiply is building its AI-enabled tech stack to make the mortgage origination process more efficient and reduce the human effort involved, creating a lower cost structure that allows Multiply to offer rate discounts and expert advisor support to its clients. "We believe Multiply's unique approach — combining AI, local expertise, and a novel distribution model — is unlocking a massive opportunity to modernize the mortgage industry and redefine how financial wellness benefits are delivered at scale," said Gautam Gupta, co-founder and general partner at A* and co-founder of Multiply. "This is a fundamental shift in how employees access homeownership, and is creating meaningful value for both employers and employees." To learn more about Multiply, visit ABOUT MULTIPLY MORTGAGE Multiply Mortgage helps employees navigate the largest purchase of their lives: buying a home. Its financial wellness benefit offers mortgage interest rate discounts of up to 0.75%, unlimited 1:1s with mortgage expert advisors, and employee education sessions covering the home purchase and financing process, all with zero cost or administrative overhead for the company. Multiply is backed by Kleiner Perkins, A*, and other leading funds, founders, and operators. View source version on Contacts Mackenzie Kreitlermkreitler@ Sign in to access your portfolio
