At Extreme Investor Network, we understand the importance of maximizing your home equity to build wealth and reach your financial goals. Recently, home equity in the U.S. has reached near all-time highs, offering homeowners a valuable asset to leverage. According to financial advisors, the total home equity for U.S. mortgage holders rose to over $17 trillion in Q1 2024, just shy of the record set in Q3 2023.
Average equity per borrower has increased by $28,000, reaching around $305,000 total, up almost 70% from before the Covid-19 pandemic. This surge in home equity is mainly due to the significant runup in home prices and the opportunity for homeowners to refinance their mortgages at low interest rates during the pandemic, allowing them to pay down their debt faster.
However, despite the substantial wealth tied up in home equity, accessing it may be challenging due to high borrowing costs. Financial advisors caution that some options which were favorable in the past may not be as attractive now due to the increased interest rates. Nevertheless, there are still viable options available to homeowners looking to tap into their home equity.
One popular option is a Home Equity Line of Credit (HELOC), which allows homeowners to borrow against their home equity for a set term, typically at a variable interest rate. Though HELOC rates are generally higher than traditional mortgage rates, they are much lower than credit card rates, making them a more cost-effective option for consolidating high-interest debt or funding home repairs.
Another option for older Americans looking to tap their home equity is a Reverse Mortgage, which allows borrowers to receive funds without needing to pay down the loan each month. This type of loan is beneficial for individuals who have most of their wealth tied up in their homes and need additional retirement income.
Selling your home or considering a cash-out refinance are also viable options for accessing your home equity, but they should be carefully evaluated based on your individual financial situation. At Extreme Investor Network, we provide personalized advice and support to help you make informed decisions about leveraging your home equity for financial growth and security. Reach out to us today to learn more about maximizing your home equity and achieving your financial goals.