Does the current state of the economy have you worried?
If so – you’re not alone. After a few bumpy years of persistent inflation and interest rate hikes, money may already be tight for you. If the economy goes into a deeper slump it could leave you scrambling to come up with the funds for necessary expenses. However…
If you’re a homeowner (or about to be one), you have a unique resource you can turn to… Your home equity.
Your equity is how much value you’ve built in your home, which you can use like cash via products like home equity loans and home equity lines of credit (HELOCs) for any number of purposes.
With a slowing economy on the horizon, if you’ve been considering tapping into your home equity, NOW may be the perfect time to do so.
Here’s a few reasons why…
🏠Banks May Be Less Likely To Lend To You
When interest rates go down, banks earn less from the money they lend. Borrowers are also more likely to default due to reduced income or losing their jobs. As a result, banks tighten their lending.
When banks and credit unions go into a credit crunch it can be harder to get approved for financing. The silver lining is that home equity loans and HELOCs are much easier to get approved for since they are secured loans (backed by your home.)
In any case – applying now can increase your chances of approval and land you better rates than seeking other types of financing.
🏠It Can Help You Get Through Financial Difficulties
A slow economy can bring sales stagnation, higher unemployment and lower purchasing power. If you lose your job or have trouble stretching your money, you may find yourself looking for ways to make ends meet. Funding sources like credit cards and personal loans come with increasingly high interest rates, costing you much more in the long run. Home equity financing is secured and thus typically comes with lower rates.
For example, current credit card interest rates average 20%. Personal loan rates average 11%, but if you look at individual loan offerings, the highest APRs hover around a whopping 36%.
Home equity rates, by contrast, are around 8%.
A HELOC can be especially helpful to secure before tough times because there’s no approval needed as to how the funds will be used. You only have to borrow the amount you need from the line of credit as you need it. And you only pay interest on the amount you borrow, not the total credit line limit. With a home equity loan, by contrast, you receive a lump sum and must pay interest on the full amount.
On top of that, HELOC repayment options are more flexible than other forms of credit,
…with many lenders allowing interest-only payments during the draw period. While we don’t recommend going the interest-only route (since you’ll rack up more interest) it is available if you get into a tight financial situation.
🏠Your Home Value May Decrease
Your HELOC or home equity loan amount is based on how much you’ve paid toward your mortgage and how much your home is worth.
For example, say you took out a mortgage for $400,000 and have paid off $100,000, lowering your outstanding balance to $300,000. If your home has appreciated to $500,000, your home equity would be $200,000 ($500,000 minus $200,000).
Home values tend to fall during hard economic times, which could leave you with less equity to draw from. Home values are still high in many parts of the country so if you apply for a HELOC now it means you could get the most equity out of your home, and get approved for the maximum amount of money should you need it.
PLUS – if you’re using your HELOC for home renovations or repairs on your primary or second home, the interest can be tax-deductible.
We want to help you avoid all that & reduce your mortgage by 50%.
We can’t wait to show you how to pay off your home using our financial strategy with a HELOC in just 5-7 years! So let’s not waste any more time…
We’ve created the Half Your Mortgage program to help you go through the entire process of securing a home equity line of credit(with the most affordable rates.) We’ll show you the right type of HELOC to go after, the exact criteria to look for, how to prepare your finances, how to calculate the interest (so you know how much you’ll be able to save), what questions to ask lenders and so much more!
You’ll even receive your very own list of state-specific HELOC lenders and access to our proprietary calculators to make the math super-easy.
Click the link below to learn everything you need to know about securing an affordable first lien HELOC so you can start using your home equity like cash in 45 days or less.
Learn More About the Half Your Mortgage Program
If you’re interested in getting started but have questions…
Book a FREE Discovery Call with Our Team to discuss how a HELOC can half your mortgage (whether it’s new or existing) by running the numbers through our proprietary software we’ll see how much you’ll save in interest and determine YOUR PAYOFF DATE! Click the link to schedule a call.
Your friends in finance,
Private Wealth Academy
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