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3 times to use a home equity loan to purchase a second home
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Are you thinking about purchasing a second home? Maybe you live in a cold climate and want a home in a warmer area during the winter months. Or, maybe you have adult children who moved away and you’d like to be near them during the holidays.
A traditional mortgage is one option for purchasing a second home, but your primary home could also help. For example, you may be able to tap into your home’s equity with a home equity loan to get the money for a down payment or cover the full cost of purchasing of a second home.
Home equity loans are often a smart option to consider because you can borrow large amounts at a competitive rate. And, since the average homeowner currently has about $193,000 in tappable equity, a home equity loan may be a compelling way to purchase a second home right now.
Find out the top home equity loan rates available to you now.
3 times to use a home equity loan to purchase a second home
Here are three times it makes sense to use a home equity loan to purchase a second home.
When you have plenty of home equity but little cash
The amount of cash required to purchase a second home is a significant hurdle for many people. And, if you take the traditional mortgage route, you will need enough for a down payment and to cover your closing costs. That often means having tens of thousands of dollars or more on hand, depending on the price of the home and other factors.
A home equity loan could be useful if you don’t have as much cash as you need on hand to purchase a second home. You can use the funds to make a down payment on the second home you’re purchasing, for example. And, depending on the amount of equity available to you, you may have enough to also cover the closing costs for your second home.
Explore your top home equity loan options online now.
When you need a fixed monthly payment
There are multiple ways to finance the purchase of a second home with your home equity. Some, like home equity loans, come with fixed interest rates. Others, like home equity lines of credit (HELOCs), have variable rates that can change over time. If your goal is to have a consistent monthly payment amount on the money you borrow from your home’s equity, a home equity loan is usually the better option.
“Fixed-rate home equity loans provide much more certainty when compared to a variable-rate HELOC because homeowners can know exactly what their monthly payment will be before taking out the loan,” says Darren Tooley, a senior loan officer at Cornerstone Financial Services. “This allows the borrower to budget and know exactly what to expect on a month-to-month basis.”
When you know exactly how much money you need
Home equity loans allow you to borrow against your equity with a lump-sum loan. As such, it can make sense to use a home equity loan to purchase your second home if you know exactly how much money you’ll need to make the purchase.
For example, you may be purchasing a new home that is unlikely to need repairs in the near future. Or, you may have a clean inspection report and aren’t planning to make updates or changes to the home’s appliances, fixtures or features.
In these cases, you likely won’t need to borrow extra home equity money for renovations or repairs, so the costs are relatively fixed in terms of the amount you need to borrow. In turn, a home equity loan can make more sense than other options.
Compare your home equity lending options to find the right loan for you today.
The bottom line
If you’re in the market for a second home, it can make sense to use a home equity loan to fund your purchase. That’s especially true if you have plenty of equity but little cash, want a fixed monthly payment amount and know exactly how much money you’ll need to purchase your second home. Compare your home equity loan options now.
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Four space station fliers undock and head for Friday splashdown to wrap up extended mission
Wrapping up an extended 235-day mission, three NASA astronauts and a Russian cosmonaut strapped into their SpaceX Crew Dragon capsule and undocked from the International Space Station on Wednesday, targeting a pre-dawn Friday splashdown in the Gulf of Mexico.
With Crew 8 “Endeavour” commander Matthew Dominick and co-pilot Michael Barrett monitoring cockpit displays, flanked on the right by cosmonaut Alexander Grebenkin and on the left by NASA astronaut Jeanette Epps, the Crew Dragon undocked from the lab’s Harmony module at 5:05 p.m. EDT and slowly backed away.
NASA TV
“Endeavour, departing,” called space station commander Sunita Williams, ringing the ship’s bell following naval tradition. “Fair winds and following seas.”
Left behind aboard the station were Crew 9 commander Nick Hague and his crewmates, cosmonaut Alexander Gorbunov and Boeing Starliner astronauts Barry “Butch” Wilmore and Williams, along with Soyuz cosmonauts Aleksey Ovchinin, Ivan Vagner and NASA crewmate Donald Pettit.
If all goes well, the Crew 8 Dragon will splash down in the Gulf of Mexico at 3:29 a.m. Friday to close out a nearly eight-month-long mission spanning 3,776 orbits and 100 million miles since launch from the Kennedy Space Center on March 3.
NASA
The crew originally expected to return to Earth in September, but the flight slipped into early October in the wake of a decision to delay the Crew 9 launch from late August to late September to provide an eventual ride home for Wilmore and Williams.
The Starliner returned to Earth Sept. 7 without its crew on board because of safety concerns. The Crew 9 Dragon then was launched Sept. 28 with just two passengers, Hague and Gorbunov. That freed up two seats for Starliner commander Wilmore and co-pilot Williams, who will return to Earth next February with Hague and Gorbunov.
Sorting all that out pushed the Crew 8 departure into October. Dominick and company then were repeatedly held up by high winds and rough seas, much of it hurricane related, at splashdown sites in the Gulf of Mexico and along Florida’s east coast.
But forecasters expected favorable conditions Friday, and the Crew 8 fliers were finally cleared to proceed with undocking.
In the final stretch before the 2024 election, Vice President Kamala Harris embarked on a three-state tour across battleground states to court swing voters — with a particular focus on those who backed former U.N. Ambassador Nikki Haley in the Republican presidential primary earlier this year.
Harris’ pitch was remarkably similar to the foreign policy warning about Trump that Haley delivered when she was a presidential candidate.
“If Donald Trump were president, Vladimir Putin will be sitting in Kyiv — and understand what that would mean for America and our standing around the world,” Harris told Oakland County voters in Michigan on Monday. Claiming Trump would surrender Ukraine to Russia, Harris added, “that is signaling to the President of Russia he can get away with what he has done. Look at the map. Poland would be next.”
As a candidate in Michigan earlier this year, Haley warned of the potential consequences of Trump’s failure to treat Putin as a threat.
“Once they take Ukraine, Poland and the Baltics are next,” Haley said. “Those are NATO countries that immediately put America at war.”
Both Harris and Haley also stressed the need to support American allies, denouncing Trump and Republicans’ views on an isolationism they say would move the U.S. closer to war.
“Isolationism, which is exactly what Donald Trump is pushing to pull out of NATO and abandon our friends,” Harris said Monday. “Isolationism is not insulation. It is not insulation. It will not insulate us from harm in terms of our national security.”
Haley criticized Trump in similar terms. “Look at the situation that the Republican Party is putting us in and that Donald Trump is encouraging — it’s this isolationist approach,” Haley told Michigan voters earlier this year. “America can never be so arrogant to think we don’t need friends.”
On Monday, Harris characterized Trump’s relationships with dictators as a threat to democracy, a point Haley also made on the campaign trail.
Trump, Harris said, “is so clearly able to be manipulated by favor and flattery including from dictators and autocrats around the world, and America knows that that is not how we stand.”
The former U.N. ambassador in January said of Trump, “You don’t befriend dictators and thugs who want to kill us.” She added, “When I was in the administration with him at the U.N., I literally had to sit him down and tell him to stop this bromance that he had with Putin.”
Harris and Haley may stand on opposite ends of the political spectrum, but Harris is tapping into their common views on foreign policy and America’s role in the world to help persuade undecided moderate Republican and independent voters in suburban areas.
In the counties where Harris campaigned on Monday across Michigan, Pennsylvania and Wisconsin, Haley earned tens of thousands of votes during the Republican primaries — even after she dropped out of the presidential race. A senior Harris campaign official said the campaign believes this is an indication of suburban voters’ discontent with Trump. The vice president has been relying on Republicans to help make her appeal to these voters, including former Rep. Liz Cheney, an outspoken critic of Trump who has endorsed Harris and campaigned with her this week. Harris also hit the trail with other Republicans and former Trump aides earlier this month.
In 2020, Joe Biden won Michigan by less than 155,000 votes. In her race against Trump during the primaries, Haley won nearly 55,000 votes in Oakland County, Michigan.
Haley dropped out of the presidential race before the Pennsylvania and Wisconsin primaries, but nonetheless, in Chester County, Pennsylvania, Haley received 9,000 votes, about 24% of the GOP primary votes in the county. President Biden’s margin in Pennsylvania was just 80,000 votes in 2020, and it was even smaller in Wisconsin — a mere 20,000 votes. Haley received 9,000 votes in Waukesha County, Wisconsin.
While Harris tries to woo former Haley supporters, Haley herself is ready to campaign for Trump, despite her warnings about him months ago.
According to a source familiar with the planning, Haley’s team has given the Trump campaign availability dates for a potential joint campaign event, and the two teams are working to schedule an appearance before Election Day.
Last month, Haley told CBS News’ “Face the Nation with Margaret Brennan” she was happy to be helpful to the campaign if needed.
“To me, the stark contrast between a Trump and Harris administration are what led me to say, yes, I need to, you know, I’m going to be voting with Trump, and I’m going to speak at the convention,” she said. “Do I agree with his style? Do I agree with his approach? Do I agree with his communications? No. When I look at the policies and how they affect my family and how I think they’re going to affect the country, that’s where I go back and I look at the differences.”
In an interview with “Fox and Friends” last week, Trump said “I’ll do what I have to do” when asked if he’d be requesting Haley’s help, but he reiterated that he “beat her badly.”
