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How to get the best home equity loan rate this August, experts say
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Today’s high interest rate environment has made borrowing more expensive than many had grown accustomed to in recent years. After a series of hikes, the federal funds rate has remained at 5.33% for over a year, up nearly three percentage points from the 2.41% peak in 2019 and up 5% from the 0% rate during the pandemic.
While a few percentage points may not sound like much, they can make a big difference when you’re taking out a loan — especially when it comes to long-term options like mortgages and home equity loans. For example, a 30-year, $150,000 home equity loan with a 9% interest rate would have a monthly payment that’s about $275 higher than the same loan with an 11.49% interest rate. Over 30 years, you’re looking at an estimated difference of over $98,600.
Fortunately, there are signs that Fed rate cuts could be on the horizon. The July statement from the Federal Reserve says the federal funds rate will remain unchanged for now, but notes progress toward the two percent inflation objective in recent months. And most economists forecast that the first Fed rate cut will occur in September. But what can you do if you want to tap into your home equity affordably in August?
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How to get the best home equity loan rate this August, experts say
Here are five steps experts recommend you take to get a competitive interest rate this month.
Compare multiple offers
Lenders vary when it comes to the interest rate ranges and eligibility requirements on their home equity loans. To find a competitive deal, you’ll want to shop around, collect quotes and compare them side by side, experts say.
“Don’t settle for the first offer. Compare rates from multiple lenders to find the best rates. Even if you need to pay a small application fee, getting a better rate can save you a lot over the long term,” says Sean Lovison, CFP, CPA and founder of Purpose Built Financial Services.
If you’re not sure where to start, a good place can be your current mortgage lender.
“I would recommend starting with your current lender who assisted you with your initial mortgage, your local bank or credit union, and a referral from friends or family,” says Jeremy Schachter, branch manager at Fairway Independent Mortgage Corporation.
Learn the home equity loan rates you could qualify for here.
Negotiate the rate
Another tactic to keep in mind is negotiation. The initial rate a lender offers you isn’t necessarily its final offer.
“Don’t be afraid to negotiate and let the lenders know about your other offers, there is always wiggle room,” says Lovison.
Consider a shorter loan term
The specifics of the loan you’re requesting will also impact your interest rate, so if you want a lower rate, you may want to consider a shorter home equity loan term.
“A shorter lifespan of a loan will normally result in a lower interest rate,” says Andrew Griffith, DBA, EA, CPA, CMA, CIA, CFE, CRMA, NTPI and fellow associate professor of accounting at Iona University.
That’s because shorter loan terms reduce the time lenders wait to get their money back, which lowers their risk.
Lovison agrees and recommends that you don’t plan to borrow longer than you need. That could mean opting for a 15- or 20-year home equity loan instead of a 30-year term, as long as the larger payments fit into your budget.
Boost your credit score
Your credit score will also play a large role in the interest rate you get. Lenders rely on credit scores to assess the likelihood that you’ll repay the amount on time.
“A higher credit score will normally result in a lower interest rate,” Griffith says.
Getting your credit score in the best shape possible before applying will help you land lower rates and better terms, experts say.
“While most factors that contribute to your score take a long time to improve, such as payment history, there are other factors that can be improved more quickly,” Lovison says.
For example, Lovison recommends reducing your credit card balances to improve your credit utilization ratio while limiting hard inquiries.
“Creditors often view low credit utilization rates favorably. This is especially true when people are paying off their credit obligations in full every month,” Griffith says.
Don’t borrow more than necessary
Lastly, experts say you should only borrow the amount you need because lower loan amounts present less risk to lenders.
“Higher equity in your home often translates to lower interest rates. This is referred to as loan-to-value (LTV) and the less you borrow relative to your home’s value, the better the rate. Don’t borrow more than necessary,” says Lovison.
Schachter says that the more equity you have left over after you take out a loan, the better.
The bottom line
While interest rates may be relatively elevated in comparison to the last 10 years, these tips can help you get the lowest rate on a home equity loan or line of credit in the current environment. Refinancing your home equity loan down the road could also be an option if rates drop significantly during your loan term.
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If you’ve paid any attention to the precious metals market recently, you’re likely aware that gold has been on an impressive upward trajectory since the start of the year. On January 1, gold was trading at $2,063.73 per ounce. Fast forward to today (October 25, 2024), and the price of gold is sitting at $2,734.46 per ounce. This represents an increase of $670.73 per ounce, amounting to a growth rate of approximately 33% in a little over 10 months. This significant growth has captured the attention of investors and market analysts worldwide, as gold’s performance defies predictions and underscores its historic role as a stable store of value.
The recent rally becomes even more noteworthy when compared to gold’s prior record highs. Just this August, the price reached $2,525 per ounce — a milestone that marked a new peak at the time. However, gold’s price was far from plateauing at that point. The price of gold continued to surge, eventually surpassing that mark by over $200 per ounce. This upward movement has established the past year as a standout year for gold, drawing investors who may have initially seen these peaks as ceiling prices, but who now view gold’s price potential as far more expansive than anticipated.
But while there’s no question that gold has offered some of the biggest returns over the past year, many investors are questioning what, precisely, is driving this sustained surge. So why is the price of gold so high right now? That’s what we’ll break down below.
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Why is the price of gold so high right now?
Here are a few of the factors that have been pushing gold’s price to new heights over the last year.
Central banks are buying in
A primary force behind gold’s recent bull run is the purchasing activity of central banks worldwide. Central banks, particularly those in emerging economies, are increasing their gold reserves as a hedge against economic uncertainty and to diversify their holdings away from traditional fiat currencies. This sustained buying pressure from such powerful market participants has created a strong foundation for price appreciation and signals a broader shift in institutional attitudes toward gold as a strategic asset.
Investors are capitalizing on short-term gains
In addition to central banks, individual investors have been flocking to gold, seeing an opportunity for both short-term and long-term gains. With gold prices rising so quickly, gold has become an attractive asset for speculative trading as well as a safer, longer-term investment. So, some investors are now seeking quick returns by betting on the momentum of gold’s climb to earn rapid profits, while others continue to rely on gold’s stability.
The rush of buying and trading activity creates a feedback loop, further driving demand and prices up. This blend of trading activity has been a core factor in the consistent upward price movement over the past year, illustrating gold’s dual role as both a stable store of value and a source of near-term market excitement.
Find out more about your gold investing options here.
More investors are diversifying
Ongoing geopolitical tensions, including election year uncertainties, are also playing into gold’s price surge. Elections can influence market sentiment by adding uncertainty, often triggering interest in safe-haven assets like gold. Additionally, global economic slowdowns and international conflicts, such as those involving energy trade disputes, have introduced more volatility in the global market, leading investors to seek refuge in gold.
With each spike in uncertainty, gold’s appeal as a safe, non-correlated asset increases, attracting investors looking to hedge against potential market downturns. For many, gold remains a reliable safeguard, reinforcing its role as a cornerstone in diversified portfolios, especially during periods of unpredictability.
The limited supply also plays a role
The limited supply of gold has also contributed to its recent price surge. Gold is a finite resource, after all, and mining new gold is both costly and time-intensive. As demand grows from both investors and industrial sectors, the pressure on gold’s limited supply intensifies, elevating its value.
Technological advancements in sectors like electronics and green energy have also increased gold’s utility. Gold is used in electronic components, medical devices and emerging green technologies, creating steady industrial demand. This expanding industrial application is a lesser-known but increasingly important factor, reinforcing gold’s value beyond traditional uses.
The bottom line
The remarkable ascent of gold prices in 2024 can be attributed to a perfect storm of global economic and political factors. Central banks’ substantial purchases, investors’ pursuit of both security and short-term gains, geopolitical uncertainties and the finite nature of gold itself have converged to create a robust and sustained rally.
Looking ahead, many analysts believe that gold’s trajectory may continue upward, especially if central banks and industrial sectors sustain their interest and if global uncertainties persist. While the current price surge may eventually stabilize, investors and analysts alike are continuing to keep a close eye on this precious metal right now, as gold continues to set new records and play a vital role in today’s dynamic economic landscape.
At 56, Kim Hale is reigniting her passion for dance, sharing her journey on social media and embracing the motto, “Dreams have no deadlines,” as she pursues a role on Broadway.
Hale, who has over 13 million likes on TikTok, said she has always loved the stage and the energy that New York City brings,
“It just feels like a city where you can dream big,” said Hale.
Hale’s dream of performing on Broadway began in her early years, driven by her passion for expressing herself through movement. She pursued that ambition into her 20s and 30s, but eventually left New York, finding the constant rejection difficult to handle. Reflecting on that time, she acknowledges that she was more vulnerable then. Relocating to California, Hale remained connected to dance, teaching and working for renowned dancer and actor Debbie Allen.
“The biggest gift I got was working for Debbie Allen, and being able to be in her world, which taught me that you can take the skills of dance and apply them to anything,” said Hale.
Hale was around dance, but she wasn’t dancing, and it turns out, that is what her heart still wanted.
“It took COVID. It took the loss of both of my parents. It took skin cancer to get me to step back into a dance studio,” said Hale.
With encouragement from a friend, Hale enrolled in a hip-hop class and “ended up loving it,” saying that each class helped her reconnect with herself.
Hale began sharing her journey on social media, where her posts took off. Broadway choreographer Jerry Mitchell commented on one of her videos, telling her, “Dreams have no deadlines.” It’s a mantra she holds close.
“I just held onto that,” she said.
In May, Hale got to perform in a special showing of “Chicago,” though she doesn’t see it as her official Broadway debut.
“I want to audition and book a show because I prepared for it. I was ready when opportunity met preparation, and I got it,” she said.
For Hale, her return to New York and pursuit of a Broadway role is about more than just achieving a dream.
“The goal is to see what I’m capable of,” she said. “You have to do the work. You have to be ready. But I believe that if it’s meant for me, it will happen. And if it’s not, maybe there’s something bigger out there.”
JC Chasez, a member of the beloved band NSYNC, is out with his first major music project in 20 years. His new album is called “Play with Fire.”
“I want to make a musical and look everybody knows me from making music so the idea is to release the music first to get people interested in the project,” Chasez said on “CBS Mornings Plus.”
He co-produced the album with Golden Globe-winning songwriter and composer Jimmy Harry. The music was inspired by Mary Shelley’s 1818 novel, “Frankenstein.”
“We’re living in a day and age where technology and humanity are interfacing like never before and Mary Shelley wrote this piece in 1818 and we’re talking about these themes today.”
It’s a subject Chasez said he’s passionate about, adding he appreciated the themes in “Frankenstein” later in life.
“We’re talking about AI. We’re talking about how we’re going to navigate a world like this and so to stumble across that, you know when you’re young you read it almost as a school project but when I read it later in life I just couldn’t believe how much it affected me,” he said.
Chasez was involved in writing the script for the musical and said they’re currently talking to directors and producers about the project.
He credits his writing partner, Harry, with helping the project come to fruition, explaining Harry’s mother was a playwright, and wrote a play called “Playing with Fire,” which Harry presented to Chasez.
“After reading it, what I loved about her story was the way she framed it in terms of making the emotional connections with the creature and the creator, you know, Frankenstein, and so we focused on the conversation that the two of them had and expanded from there and kind of came up with our own things.”
Although it’s a departure from his pop music background, Chasez said it still has elements of his past.
“There’s other songs that have that tempo, and have that pop flair and things like that, because I want people to still move and have fun,” he said. “The goal is to just really be engaging, and give people something to talk about when they’re listening to it or when they’re seeing it hopefully in the future.”
When asked if we’ll also see an NSYNC reunion in the future, Chasez said the former bandmates have talked about the possibility more than they have previously.
“Right now, Justin’s got a tour to do, and I’m releasing this record, “Playing with Fire,” so our focus is on our current projects, but there is always a conversation being had behind the scenes about the potential of something.”
