Demand will simply shift from a purchase loan or using a credit card to obtaining a home equity loan or home equity line of credit (HELOC).
Chicago, IL (PRWEB) March 15, 2014
Peoples Home Equity was intrigued by news release from Corelogic titled “The Home Equity Incentive.” The release argues that both rising mortgage rates and home prices will give incentives current homeowners to obtain financing for new home purchases or improvements through home equity loans or lines of credit, rather than a traditional route of financing.
“As house prices recover and interest rates rise, existing homeowners are gaining back equity in their homes that they can borrow against, and so are incented to get a home equity loan rather than to move or refinance,” states the release.
This news is encouraging for lenders, like Peoples Home Equity, about the future of housing since both mortgage rates and home prices seem poised to rise further. Demand will simply shift from a purchase loan or using a credit card to obtaining a home equity loan or home equity line of credit (HELOC).
Home equity loans are popular among homeowners because they require zero money down, instead the homeowner uses the equity in their house as a down payment as collateral. Since, mortgage rates have been rising steadily since 2012, the view is not to use a home equity loan for refinancing, since that may be at a higher rate, but specifically for a new home purchase or home improvements. This news is positive for anyone who though housing demand from existing homeowners may dwindle since they may obtain this route of financing to purchase an investment property. The news is also uplifting for the home improvement industry which is set to grow from this spring to late summer.
If interested in obtaining a home equity loan or line of credit, consider Peoples Home Equity. The lender’s website has numerous financial calculators including one called “How Much Will I Save By Refinancing My Loan?” which can assist in seeing if refinancing is a good move.
Please contact Peoples Home Equity loan officer today for mortgage details at: (855)-897-0300