Spring is here! The change in season brings new additions to everyone’s “to do” list. Whether it’s hiring a contractor for updates to your home, planning for the family vacation, or preparing for your child’s college experience or wedding —there’s usually a cost to accomplish your goals. Whether you need a lot or a little, Standard Bank offers families the flexibility to access funds quickly and inexpensively.
Avoid draining your bank account or investments and consider covering these expenses by utilizing the equity in your home with a home equity loan or a home equity line of credit (HELOC). Thanks to the recent real estate boom, you may have more equity in your home than ever before.
“Nationally, as of 2021 Q3, a homeowner who purchased a single-family existing-home 10 years ago at the median sales price of $169,000 is likely to have accumulated $225,000 in home equity or housing wealth if the home were sold at the median sales price of $363,100 in 2021 Q3,” claims the National Association of Realtors.1
In addition to having access to more value than ever before, home equity loans are the most flexible type of financing you can obtain since you can use the funds in any way you wish. Or multiple ways. Short term projects or long term goals. Quick escapes or dedicated remodels. Your funds will be yours to use as you wish.
Your project may dictate if you want the funds all at once or only as needed. Our bank offers two options: First, a home equity loan that provides you with all of the funds at the time of closing, which also provides you with a set repayment period and payment. Second, a HELOC provides the flexibility for you to access funds when you need them over the term of the loan. HELOC’s offer an interest-only payment period, prior to the loan repayment period, providing borrowers with an initial low monthly interest-only payment.
To homeowners, it really depends on what is being financed or the reason for the loan.
There are several other benefits when it comes to home equity loans or lines of credit:
The process (generally) will not take more than a month. The bank needs to value the equity in your home and process the appropriate paperwork.
Home equity closing costs are pretty affordable. As we publish this article, for Standard Bank, home equity closing costs can range from $325-$893. While these costs typically are custom to the loan and can change, the cost is significantly less than a mortgage loan — especially when you combine them with the lower interest rates.
Credit card and unsecured loan rates can be extremely high. In March, www.creditcards.com reported the average credit card rate was 16.36%.2 Rates for home equity loans are much more modest since they are secured by the equity in your home. If you are in the market for a home equity loan, know that rates have already risen and are projected to raise six more times in 2022.3 The sooner you apply for your loan, the lower your rate may be!
Standard Bank provides you with the flexibility to securely apply for a home equity loan on the Standard Bank website (or by visiting your local Standard Bank office). The application takes around 10 minutes. Simply input the information you know and sit back and await a call from your personal banker who will explain the next steps.
Thanks to the passage of the Tax Cuts and Jobs Act of 2017, you may be able to write off the interest of your home equity loan if the funds are used to buy, build, or significantly improve the property securing the loan. However, consult your tax advisor to verify if your project/loan would qualify.
1 Scholastica (Gay) Cororaton (2022, January 7). Single-family Homeowners Typically Accumulated $225,000 in Housing Wealth Over 10 Years. National Association of Realtors. Retrieved March 16, 2022, from https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typical ly-accumulated-225K-in-housing-wealth-over-10-years
2 Dillworth, K. (2022, April 20). Average credit card interest rates: Week of April 20 2022. Credit Cards.com. Retrieved April 21, 2022, from https://www.creditcards.com/news/rate-report/
3 Smialek, J. (2022, March 16). Fed Raises Rates and Project Six More Increases in 2022. New York Times. Retrieved March 18, 2022, from https://www.nytimes.com/live/2022/03/16/business/