Latest news with #StevenGlick
CBS News
28-07-2025
- Business
- CBS News
Is a HELOC or home equity loan the better choice this August? Here's what experts say
Many homeowners are reassessing their borrowing options as market conditions continue to shift in the second half of 2025. While home values have climbed nationwide to a record high median of $396,000, elevated interest rates, rising inflation and uncertainty surrounding the Federal Reserve's rate moves continue to complicate financing decisions. And, if you're a homeowner who's looking to tap into your home equity, you may wonder: Is it better to get a home equity line of credit (HELOC) or a home equity loan right now? Given how much the rate environment has changed, it's worth understanding how each option fits your circumstances. Below, mortgage professionals share what you should consider when deciding between these products in August. Find out how affordable your home equity borrowing options could be today. "In August 2025, we're recommending home equity loans more often than HELOCs for clients seeking predictability," says Ryan Leahy, senior loan officer and regional production manager at Leahy Lending. "With interest rates still elevated and the Fed keeping markets on edge about future hikes, locking in a fixed rate with a home equity loan gives peace of mind." Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad, is leaning toward recommending HELOCs. "If the Fed follows through with one or two more cuts this year, HELOC rates could drop further, saving [you] money without needing to refinance," Glick says. Ultimately, though, both experts emphasize that the choice depends on your financial situation and how you plan to use the money. Compare your home equity borrowing options and lock in a great rate now. "A HELOC makes sense when [you] need flexibility or anticipate multiple expenses over time," Glick says. This approach shines for multi-phase renovations, medical bills or situations where you're unsure how much you'll need to borrow. But before opening a HELOC this month, you should weigh the benefits and drawbacks: Pros Cons A home equity loan makes sense when you need all the money at once for a specific purpose. A good example would be "consolidating credit card debt or funding a major home repair," says Glick. If you're considering a home equity loan, experts encourage weighing the trade-offs: Pros Cons Three factors should guide your decision between a HELOC and a home equity loan, experts say: "[Start by looking at] the annual percentage rate (APR)," Gennarelli says. This includes all fees, giving you a complete picture of what you'll pay. Beyond comparing APR, Glick recommends preparing your finances and shopping strategically: With mixed signals on Fed policy and inflation continuing into August, Calixto advises against trying to predict rate movements. Instead, choose the loan that fits your financial needs and what you can afford each month. For personalized guidance, speak with at least two to three reputable home lenders. They'll help you compare terms and fees, and match the right product to your situation and long-term goals.
CBS News
11-06-2025
- Business
- CBS News
Will home equity loan rates fall after the June Fed meeting? 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. The potential for home equity rates to fall further after the June Fed meeting depends on multiple factors. Getty Images Even with cooler inflation, the Federal Reserve has kept interest rates steady through the first half of 2025. This cautious approach has left homeowners wondering when borrowing relief might come, particularly with the Fed's June meeting right around the corner. Will policymakers signal future rate cuts or continue to hold the line? This question looms large if you're considering a home equity loan or home equity line of credit (HELOC). While Fed decisions don't directly control these rates, they do influence the broader interest rate environment that affects your borrowing costs. We asked mortgage analysts and lending professionals what homeowners can expect from home equity rates after the June meeting. Below, we'll examine their predictions. Start by seeing how low of a home equity loan rate you'd currently qualify for here. Will home equity rates fall after the June Fed meeting? Industry professionals generally don't expect a notable decline right after the June 18 Fed meeting. "I don't see home equity rates dropping much," Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad, says. The odds favor the Fed keeping rates unchanged this month, largely because inflation remains above the 2% target and the economy continues to hold up. When rate changes do come, though, they won't affect all home equity borrowing the same way. Debbie Calixto, sales manager at mortgage lender loanDepot, explains that HELOCs are tied to the Prime Rate, which closely follows the Federal Reserve's benchmark interest rate. "When the Fed lowers its rate, HELOC rates usually decrease by a corresponding amount," she says. Home equity loans, however, connect more to the bond market and broader economic conditions rather than the Fed's interest rate. "While fluctuations are always possible, home equity loan rates will likely remain stable following the Fed's June meeting," predicts Calixto. "Barring any significant economic events, we can expect only minor movements in these rates [this] month." Looking beyond June, the picture improves. Glick sees better odds of a rate cut by fall — and if that happens, he expects home equity rates to ease modestly. Joe Perveiler, senior vice president and home lending executive at PNC Bank, also thinks rates will likely fall over the next six months. However, pinpointing exactly when is difficult. See what HELOC rate you'd be eligible for here. Key considerations when weighing home equity borrowing Beyond keeping an eye on the Fed's imminent move, experts say three practical factors should guide your home equity borrowing decision: Understand your true purpose for borrowing Glick emphasizes being crystal clear about why you need the money. "Using equity for home improvements that add value or to pay off high-interest credit card debt makes sense," he says. "But using it for vacations or risky investments … you're putting your home on the line." Debt consolidation represents one of the strongest cases for home equity borrowing. "If [you're] looking to consolidate debt, today's home equity rates are still substantially lower than average credit card or personal loan rates," Perveiler points out. "It's an excellent option to save on interest costs and lower [your] monthly payments." Know your home sale timeline and long-term goals Besides interest rates, timing matters. "If you plan to sell within the next few years, drawing down your available equity now could limit your flexibility and financial gain when it's time to sell," warns Calixto. She also stresses considering how accessing your home equity fits into your big-picture financial goals. "Will this decision delay retirement savings, college funding or other major milestones? Be sure the short-term advantages don't come at the expense of long-term financial health," she adds. Ensure you can handle the payments Dean Rathbun, executive vice president of United American Mortgage Corporation, encourages asking yourself: "Do I need these funds, and do I have a plan to pay off this debt in the foreseeable future?" HELOCs come with a payment structure that trips up many borrowers. "The most common overlooked item is that the initial years of a HELOC are interest-only," Rathbun explains. "By making the minimum interest-only payments, the balance remains the same. Try to make [more] principal paydowns as you go, so once the loan becomes fully amortizing, the payment won't be as high." Calixto highlights the stakes involved. "While missing a credit card payment might damage your credit score, falling behind on a mortgage can have much more serious consequences, including foreclosure risk," she cautions. The bottom line Instead of getting hung up on home equity loan interest rates alone, Glick advises focusing on your financial stability and what you're trying to achieve. Remember that your home functions as collateral here, so thoughtful borrowing matters more than perfect timing. If you're considering equity borrowing options now, speak with a couple of home lenders to compare rates and full terms. A credible one will help you determine if tapping your home's equity matches your financial goals this June.
CBS News
02-06-2025
- Business
- CBS News
Home equity borrowing advice that owners should know now, according to lenders
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Before you tap into your home equity, make sure you know what experts say about navigating this type of borrowing now. Getty Images Finding affordable ways to borrow money has become increasingly challenging. Popular avenues such as credit cards and personal loans carry steep interest rates right now, straining household budgets in today's high-rate environment. However, home equity loans and home equity lines of credit (HELOCs) stand out as cost-effective alternatives for consolidating debt, funding renovations or covering major expenses. Since they use your home as collateral, they can give access to funds at lower interest rates. With the average American homeowner sitting on around $313,000 in equity, these products unlock a valuable financial resource when used strategically. Below, lending experts share their top advice for homeowners thinking about borrowing equity right now. Find out how affordable home equity borrowing could be now. Home equity borrowing advice that owners should know now Here's the home equity borrowing advice lenders say can help you save money now: Lock in promotional rates for short-term needs Some lenders are currently offering HELOC rates as low as 5.99% for the first six months, lenders say. Steven Glick, director of mortgage sales at real estate investment fintech company HomeAbroad, says these deals work especially well if you're considering home upgrades that add immediate value to your property. He recommends matching your timeline to the promotional period. If you're planning a kitchen upgrade or bathroom renovation that you can complete within half a year, these starter HELOC rates can provide substantial savings. But don't let a flashy rate fool you, Joe Perveiler, senior vice president and home lending executive at PNC Bank, emphasizes. "Compare multiple lenders and review the full offer, not just the rate and terms," Perveiler says. "Sometimes, a low rate can end up costing more if it has higher closing costs and other fees." Strive to find the best overall deal rather than the lowest introductory rate. Learn more about the home equity options available to you today. Shop for low or no-fee deals Competition among lenders is creating wins for borrowers who take the time to shop around. Banks are waiving HELOC closing costs and offering rate discounts for autopayments as they fight to capture market share. Glick says comparing at least three lenders can help you shave 0.5% to 1% off your rate. As you shop, note that the differences between lenders go beyond basic rates and fees. Debbie Calixto, sales manager at mortgage lender loanDepot, points out that some lenders charge early termination fees while others don't. These hidden costs can impact your total borrowing expense, especially if your plans change. Prioritize high-ROI home improvements HomeAbroad's Glick suggests focusing on projects that offer a significant return on investment (ROI), add resale value or reduce utility bills rather than discretionary upgrades. For example, energy-efficient windows or a new HVAC system can increase your home's value by 5% to 10% while potentially qualifying for tax-deductible interest. With home values up but inventory tight, improvements that boost your property's appeal become even more valuable. Consider getting a HELOC If you're in a stable financial position, Calixto says now could be a great time to set up a HELOC, even if you don't need the funds right away. A HELOC gives you access to funds when needed without holding a balance upfront. "[You] only [pay] interest on the amount borrowed," Calixto explains. That makes this type of borrowing a flexible financial safety net for future expenses. Timing may work in your favor with HELOCs. Since these products have variable rates, expected Federal Reserve rate cuts mean your rate could drop over time. Perveiler notes that today's rates are already lower than earlier this year, and they could fall further if the market shifts. Weigh the advantages and drawbacks of HELOCs and home equity loans Perveiler explains that HELOCs let you borrow only what you need. This helps you keep monthly payments manageable while taking advantage of lower starting rates and higher loan limits than credit cards. But their variable rates mean your payments can increase if market rates rise. Home equity loans work differently. They have fixed rates, which means predictable payments throughout the loan term. You get a lump sum upfront that you can spend or invest as you see fit, with no ongoing account fees. The downside is the risk of borrowing too much and paying unnecessary interest, or borrowing too little and needing another loan later. Origination fees and closing costs can also make them more expensive than HELOCs in some cases. The bottom line "Using your home equity can be valuable [for] consolidating debt, [funding high-return] investments or [improving] your monthly cash flow," says Calixto. "When used responsibly, [it] can be a powerful [way to] build wealth and increase financial flexibility." Before committing to either home equity borrowing option, speak with at least three lenders to compare rates, fees and terms. A trusted mortgage professional can help you achieve the right balance between immediate savings and long-term financial security.
CBS News
15-05-2025
- Business
- CBS News
Is your home equity trapped right now? Here's what experts say to do.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. There are still reliable ways to free up equity in your home, even in today's economic climate. Getty Images Homeowners have various financing options through their home equity. But in today's economic climate, it's become harder to access. After its third meeting in 2025, the Federal Reserve held interest rates steady again, bringing no reprieve to borrowers in its quest to fight inflation. Due to ongoing uncertainty and fluctuations in the market, some banks have tightened their lending criteria in certain areas. So while homeowners have benefited from increasing home values, not everyone can take advantage of home equity borrowing. According to the March 2025 Intercontinental Exchange (ICE) Mortgage Monitor Report, homeowners are sitting on an average of $313,000 in home equity. But due to stricter credit requirements, rising borrowing costs due to elevated rates, and a shifting job market, equity is essentially inaccessible for some and "trapped." If you're a homeowner, you might feel your home equity is trapped and wonder what next steps you can take. We spoke with home lending experts to uncover what's driving this and what you can do to effectively use your home equity. Start by seeing how much home equity you could borrow here. Is your home equity trapped right now? Home equity has long been a powerful borrowing tool for homeowners. Whether it's used for debt consolidation or home renovations, it's a way to get the most out of your home while keeping borrowing costs relatively low. But "trapped" equity, which means equity that is built in but not readily or easily accessible, can be holding people back for several reasons, including: Elevated interest rates Some homeowners were fortunate enough to secure historically low mortgage rates several years ago. While having a low mortgage rate is a benefit, it can also lead to home equity being "trapped." First, many homeowners don't want to sell their home now because it would meant they'd have to give up their low mortgage rate. If they sell now, they can cash in on that equity. But if they want to buy another home, they have to contend with current mortgage rates, which are significantly higher than several years ago. According to a survey, 55% of respondents who have been thinking of selling their homes for more than one year feel locked in due to mortgage rates. Currently, 82% of outstanding mortgages have a sub-6% rate, according to Compare that to current Freddie Mac data, which shows that mortgage rates on a 30-year fixed-rate mortgage are currently 6.76%. "With fewer homes for sale, selling to access equity often means buying another home at today's high prices and rates. That's a tough pill to swallow, so many stay put, keeping equity locked," says Steven Glick, director of mortgage sales at HomeAbroad, a real estate investment fintech company. Another common way for homeowners to tap their equity is through a cash-out refinance. But with elevated interest rates, for many Americans, it simply doesn't make sense. "A lot of people either bought or refinanced during 2020, 2021, when rates were pretty low. When you want to get equity out of your home, typically you really do that in one of three ways," says Rose Krieger, senior home loan officer at Churchill Mortgage. "The first one would be a cash-out refinance, which would affect your overall interest rate. You would be subject to the current market rates. For a lot of people, that's double, if not a little bit more than what their current interest rate is, which would significantly increase their monthly payment." Compare your home equity borrowing options to determine which is most cost-effective now. Stricter lending requirements Home equity borrowing options are an attractive alternative to other loan products, especially high-interest credit cards. Even so, borrowers must meet the eligibility requirements set by home lenders and financial institutions. That means looking at your credit history, debt-to-income ratio and employment situation. Some employment sectors are seeing tumultuous upheavals that can affect home equity borrowing. "Layoffs in sectors like tech and government make lenders cautious. They worry you might not repay if your income is unstable. Plus, fears of a recession or tariff-driven market swings add risk, so banks tighten the purse strings," says Glick. Point estimates that every year, 1 in 11 homeowners who have a mortgage experience a job loss, decrease in pay, or transition to self-employment. These events may affect credit, job stability, and income verification. Because of that, equity may become "trapped" because borrowers no longer meet the basic underwriting criteria set by home lenders. What to do if your home equity is trapped If you feel like your home equity is trapped, it can be frustrating. You may feel you can't take advantage of the built-in wealth your home provides. Here are some practical tips to help you tap your home equity: Look into alternative home equity borrowing options Given the high-rate climate we're in, a cash-out refinance may be off the table. But there are two other home equity borrowing options that may be a better option during these times. "So the best option for homeowners who want to tap into equity without refinancing, I would say it's HELOCs, which is the most flexible way," says Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors. Home equity loans are another option. Unlike home equity line of credit interest rates, which are typically variable, home equity loan interest rates are fixed. Evangelou says home equity loans are "great for one-time, large expenses. Budgeting is easier because you know your payment. You know your payment and the interest costs from the start." With home equity loan and HELOC borrowing, you can maintain your current mortgage rate while tapping your home equity. "I feel like the HELOCs are more popular right now because they do not affect your first mortgage rate. So if your rate is two and a half right now and you get a HELOC, you're still going to have that two and a half rate on your first mortgage," says Krieger. Improve your credit If you're unable to access your home equity due to your credit, you can take steps to improve your rating. Both payment history and credit utilization have a major impact on your credit score. Krieger recommends working on your credit, but also discussing your options with a lender. "Just paying off all your debt isn't the answer. We usually have different systems, computer software that we can use to help give you an idea of what to pay off versus what not to pay off to get your credit where it needs to be for a HELOC. I think that would be one of the easiest ways," says Krieger. Stabilize employment history If you've been laid off or transitioned to self-employment, it may be tough to qualify for home equity borrowing products. Home lenders like stability and want the assurance that you have the means to repay what you borrow. Focus on stabilizing employment history and income so you have the verification you need. "For self-employment, typically you're required to be on that job for two years. But with HELOCs, the rules can be a little different at times," says Krieger. The bottom line As a homeowner, you've likely seen remarkable growth in your home equity over the past few years. But if your home equity is trapped, you may not be able to take advantage of it the way you want. Taking steps to improve your credit, stabilize employment, and looking into alternatives to a cash-out refinance can help. Look at various home lenders' terms and eligibility requirements. Compare home equity line of credit and home equity loan rates. Despite rates being higher than they were several years ago, relative to other borrowing options, they still typically come out on top in terms of cost savings.
CBS News
24-04-2025
- Business
- CBS News
What could happen to mortgage rates this May?
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Some changes could be coming for mortgage rates this May, experts say. Getty Images Mortgage rates remain higher than many homebuyers prefer right now as inflation persists and the Federal Reserve maintains elevated benchmark rates. And with May approaching, bringing both market changes and another scheduled Fed meeting, uncertainty looms. So what could happen to mortgage interest rates this upcoming month? We consulted mortgage lending experts to break down three possible scenarios for May's mortgage rates. Below, they explain what might push rates up, down or keep them steady — and what that means for your homebuying decisions. Compare today's top mortgage loan options online now. What could happen to mortgage rates this May? "I'm predicting mortgage rates will go slightly lower in May 2025, likely settling between 6.4% and 6.6% for a 30-year fixed," says Steven Glick, a licensed mortgage loan officer and director of mortgage sales at HomeAbroad, a real estate investment fintech company. Other mortgage experts echo similar sentiments about limited movement ahead. For example, Karen Mayfield, national head of originations at Multiply Mortgage, a mortgage-as-a-benefit provider, expects daily volatility — but within a 0.25% to 0.375% range in movement overall for the next few months. But mortgage forecasts are just educated guesses based on trends we're seeing. Let's examine what could drive rates in each possible direction next month: Why mortgage rates could drop in May "For rates to dip, we'd need a clear sign the economy's cooling off," explains Glick. "If inflation falls closer to the Fed's 2% target [and] the Consumer Price Index drops to 2.5% or lower in April's report, that could spark talk of a Fed rate cut." When Treasury yields drop in response to cooling inflation, mortgage rates often follow. Consumer behavior already suggests this cooling may be underway. "The consumer has lost some confidence in the market," notes Dean Rathbun, executive vice president at United American Mortgage Corporation. He's seeing reduced spending on goods and services. This could signal to markets that economic growth is stalling, potentially leading to lower interest rates. Find out how affordable the right mortgage loan could be now. Why mortgage rates could stay the same in May "Rates could hold steady if the economy keeps humming along without big shocks," says Glick. "If inflation stays around 2.8% to 3%, and job growth continues at a moderate pace, the Fed's likely to keep their hands off the benchmark rate at the May meeting." This scenario would keep Treasury yields near 4.3%, resulting in mortgage rates remaining in the mid-6% range. Why mortgage rates could rise in May "Rates could climb if the economy heats up," warns Glick. "If inflation jumps past 3%, yields could hit 4.5%." A stronger-than-expected jobs report would likely cause lenders to increase rates, with Treasury yields rising in response to signs of economic strength. Market uncertainty creates another path to higher rates. "The mortgage markets like security and certainty, neither of which they are seeing right now," explains Rathbun. "Therefore, rates increase to offset the potential risk that bonds incur." Mayfield adds that international factors could drive mortgage rates up. "China is a major holder of U.S. Treasuries and mortgage-backed securities," she says. "If they retaliate by selling these assets, we could see a spike in mortgage rates." Smart strategies for navigating uncertain rate environments With May's mortgage rate direction unclear, practical strategies are more helpful than perfect predictions. Mortgage professionals recommend the following: Plan ahead: "Begin the pre-approval process early, even before you're ready to make an offer," advises Debbie Calixto, sales manager at mortgage lender loanDepot. This gives you time to improve your credit score debt-to-income ratio "Begin the pre-approval process early, even before you're ready to make an offer," advises Debbie Calixto, sales manager at mortgage lender loanDepot. This gives you time to improve Focus on your timeline (not the market's): Buy when it makes sense for your life situation. "It's nearly impossible to predict or perfectly time the mortgage market," Calixto explains. If rates drop later, refinancing remains an option Buy when it makes sense for your life situation. "It's nearly impossible to predict or perfectly time the mortgage market," Calixto explains. If rates drop later, Consider alternative loan products: "Check out adjustable-rate mortgages (ARMs)," suggests Glick. "[They] often start lower than fixed rates." These can be advantageous if you know you'll sell or refinance within a few years. "Check out adjustable-rate mortgages (ARMs)," suggests Glick. "[They] often start lower than fixed rates." These can be advantageous if you know you'll sell or refinance within a few years. Explore rate buydowns: "If you've got cash to spare, paying points upfront to lower your rate can cut your monthly payment," Glick notes. This strategy is ideal if you plan to stay in your home long-term. The bottom line While rates could stay steady or drop slightly in May, they could also rise if market conditions shift. "If you're comfortable with your estimated monthly payment at current rates, it's wise to secure that rate," advises Calixto. Now is a good time to contact several lenders for personalized guidance. Ask about rate-lock options, compare loan products and determine your comfort level with today's payments. And remember, the peace of mind from a secured rate often outweighs the gamble of waiting for drops.
