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3 pros and cons of using home equity in 2024
Last year was a difficult one for borrowers. The cost of everything from mortgages to personal loans to credit cards spiked due to higher interest rates sparked by elevated inflation. And while this may have been beneficial for savers with high-yield accounts, it was largely problematic for millions of borrowers. That said, 2023 also had some significant, positive developments, particularly for existing homeowners.
Thanks to a combination of factors, the amount of equity the average homeowner has rose last year to around $200,000. That’s a significant amount of money, particularly considering that most lenders will let you borrow 80% of that equity to use as you wish. And just weeks into the new year, there may be plenty of reasons to tap into it. But what are the pros and cons, exactly, of using home equity in 2024 versus another year? Below, we’ll explore a few of each to help borrowers make a better-informed decision.
Start by exploring your home equity rate options here to see what you qualify for.
3 pros of using home equity in 2024
Here are three timely benefits of using home equity in 2024.
It’s (still) cheaper than the alternatives
While rates ticked up on virtually all borrowing products last year, including home equity loans, they’re often still significantly cheaper than the alternatives. While personal loans can be in the double digits and credit cards hover around 20% right now, rates on home equity loans and home equity lines of credit (HELOCs) are 8.91% and 9.31%, respectively. That could add up to significant savings when measured against the alternatives.
See what home equity rate you could secure here.
You can potentially get more money
Another way that home equity borrowing is beneficial compared to other options is the amount you can receive. Most borrowers will let you borrow 80% to 90% of your existing home equity. Using that average of $200,000 as an example, then, you could withdraw $160,000 to $180,000. And that’s just the average. If you have more equity, you could borrow even more.
It could be tax-deductible
If you take out a home equity loan or HELOC this year it could help you now — and boost your tax return next year. That’s because the interest on either option is tax-deductible if used for qualifying purposes.
“Interest on home equity loans and lines of credit are deductible only if the borrowed funds are used to buy, build, or substantially improve the taxpayer’s home that secures the loan,” the IRS says. “The loan must be secured by the taxpayer’s main home or second home (qualified residence), and meet other requirements.”
3 cons of using home equity in 2024
And here are three drawbacks of using home equity this year.
Rates could drop post-application
Many economists and experts are predicting interest rate cuts this year, which could be good for those who apply when rates are lowered — but slightly troublesome for those who previously locked in a higher rate. But there are alternatives to avoid this scenario.
Home equity loan users could always refinance their loan if rates drop low enough to justify the move. Or, borrowers could apply for HELOCs now, which come with variable interest rates and are likely to fall whenever the Fed makes any cuts.
Your equity could change
Interest rate cuts could also affect your home equity. If rates come down, it’s expected that homebuyers will enter the market. This could, theoretically, lead to an increase in home prices with so many buyers competing. Or it could result in a home price drop if some buyers want to sell quickly.
It’s too early to know for sure what will happen, but don’t be surprised if the amount of equity that’s usable in January 2024 is different by the end of the year.
Your home is the collateral
While the economy is on the rebound, there’s still work to do post-pandemic and post-decades-high inflation. So there’s still some volatility.
Combined with political turmoil abroad and political unrest at home, some borrowers may want to think twice about taking their existing money out of their investment, particularly when they know that the home serves as collateral in these situations. Crunch the numbers and be as certain as possible about acting in today’s climate before submitting your application.
Start researching your home equity borrowing options online now.
The bottom line
The decision to use your home equity in 2024 is a personal one. For some, the lower interest rates, significant amount of available equity and interest tax deduction for qualifying home repairs and renovations may be worthwhile. But the year is still young and others may want to be more careful, especially if they think rates could drop after they apply. Their existing equity could also change alongside today’s real estate market, and the decision to use their home as collateral is an important one to get right.
Not sure if a home equity loan or HELOC makes sense for you this year? Learn more here today.
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Woman linked to 14 cyanide murders is convicted and sentenced to death in Thailand
A Thai woman believed to be among the worst serial killers in the kingdom’s history was convicted and sentenced to death Wednesday for poisoning a friend with cyanide, in the first of her 14 murder trials.
Sararat Rangsiwuthaporn, 36, an online gambling addict, is accused of swindling thousands of dollars from her victims before killing them with the chemical.
A court in Bangkok convicted her Wednesday for fatally poisoning her friend Siriporn Kanwong.
The two met up near Bangkok in April last year to release fish into the Mae Klong river as part of a Buddhist ritual.
Siriporn collapsed and died shortly afterwards and investigators found traces of cyanide in her body. Last year, police said they collected fingerprints and other evidence from Sararat’s Toyota Forerunner.
Police were then able to link Sararat to previously unsolved cyanide poisonings going back as far as 2015, officers said.
“The court’s decision is just,” Siriporn’s mother, Tongpin Kiatchanasiri, told reporters following the verdict. “I want to tell my daughter that I miss her deeply, and justice has been done for her today.”
Police said Sararat funded her gambling addiction by borrowing money from her victims — in one case as much as 300,000 baht (nearly $9,000) — before killing them and stealing their jewelry and mobile phones.
She lured 15 people — one of whom survived — to take poisoned “herb capsules,” they said.
Sararat faces 13 more separate murder trials, and has been charged with around 80 offenses in total.
Her ex-husband, Vitoon Rangsiwuthaporn — a police lieutenant-colonel — was given 16 months in prison and her former lawyer two years for complicity in Siriporn’s killing, the lawyer for the victim’s family said.
The couple, while divorced, had still been living together, the BBC reported. Police said Rangsiwuthaporn was likely involved in Sararat’s alleged murder of an ex-boyfriend, Suthisak Poonkwan, the BBC reported. Police said that after she killed him, Rangsiwuthaporn picked her up in her car and helped her extorte money from Suthisak’s friends.
Thailand has been the scene of several sordid and high-profile criminal cases.
Earlier this year, six foreigners were found dead in a luxury Bangkok hotel after a cyanide poisoning believed to be connected to debts worth millions of baht.
CBS News
Endangered fin whale measuring nearly 50 feet found dead near Anchorage, drawing curious onlookers to beach
An endangered fin whale that washed up near a coastal trail in Alaska’s largest city has attracted curious onlookers while biologists seek answers as to what caused the animal’s death.
The carcass found over the weekend near Anchorage was 47 feet (14.3 meters) long – comparable to the width of a college basketball court – and female, according to National Oceanic and Atmospheric Administration biologists.
Barbara Mahoney, a NOAA biologist examining the whale, told the Anchorage Daily News the whale was likely 1 to 3 years old.
Fin whales are the second-largest whale species, according to NOAA Fisheries, and fully grown can reach up to 85 feet long and weigh between 40 tons and 80 tons. Strikes by ships, entanglements in fishing gear, underwater noise and the effects of climate change are among the threats that fin whales face, according to the agency.
Mandy Keogh, a NOAA marine mammal stranding coordinator, said fin whales generally aren’t seen this close to Anchorage and that recent high tides may have pushed the animal further into the Knik Arm.
People trekked across the mudflats to see the whale, which NOAA biologists and staff from Alaska Veterinary Pathology Services had anchored to the shore Sunday so they would be able to gather samples from the animal. But even after samples are analyzed, it can be difficult to determine a cause of death because of decomposition or a lack of obvious injuries, Keogh said.
Daisy Grandlinard was among the parents who accompanied a group of children to see the whale Monday. As they drew closer, they could smell it, she said.
“It was really interesting for the kids to be able to feel it, touch the bottom because it kind of had tracks on it, like a sled almost. And just to see the size of it, that was pretty cool,” she said. “We had already studied whales a couple of weeks ago, so it was fun to see one in person and say, ‘Oh, that’s what the baleen looks like in real life,’ and ‘Where is the blow hole?’ “
Biologists hoped to complete their work Tuesday, untether the carcass and “let the tide push it or move it,” Mahoney said. “Whatever it does or doesn’t do – we don’t know.”
According to NOAA, the whaling industry killed nearly 725,000 fin whales in the mid-1900’s in the Southern Hemisphere alone. Today, the major threat to the species comes from vessel strikes.
Other fin whales have washed ashore along the Western U.S. this year. In August, a large fin whale washed ashore in Southern California and died before rescuers could get to the scene, CBS Los Angeles reported. Officials said the whale, which was not fully grown, was believed to be in poor health due to visible bumps on its skin and a thin build.
In February, a 46-foot-long whale was found washed up on an Oregon shore — emaciated, entangled and covered in what appears to be wounds from killer whales.
CBS News
How Laken Riley’s death sent “a reality shock” through the college town of Athens, Georgia
Just two blocks from the University of Georgia campus, in a downtown courtroom in Athens, Georgia, Jose Ibarra is on trial for the murder of 22-year-old Laken Riley, a former UGA student who transferred to the nursing program at Augusta University’s Athens campus.
In late February, Riley was attacked during her morning jog on a trail near the University of Georgia’s intramural fields. As the investigation and trial unfolded, members of the Athens community grappled with a shaken sense of security.
“Just because we’re on campus doesn’t mean, necessarily, that the bad parts of the world can’t get in,” said Allison Mawn, a fourth-year student. “She did everything right. She told friends where she was going, she went on a popular trail during the day. She had her tracking location on. She even managed to call for help, and still it wasn’t enough.”
The case was thrust into the national spotlight when authorities arrested Ibarra, an undocumented Venezuelan immigrant who entered the country two years ago, and charged him with murdering Riley. In the midst of the election cycle, her death quickly became a flashpoint in the immigration debate, with former President Donald Trump and his supporters raising it at rallies and President Biden responding to heckling about it in his State of the Union address.
“In an instant, all the eyes across the country are on us,” said Mawn. “Now you can’t say the name Laken Riley without thinking about undocumented immigrants and illegal immigration.”
Students have organized vigils and prayer groups, and participated in protests, rallies and runs in memory of Riley. A GoFundMe set up by her family amassed over $250,000 in donations that will go to the Laken Hope Foundation, an organization that will “promote safety awareness for women, aid and tuition assistance for nursing students, and children’s healthcare… all causes that Laken felt strongly about.”
For many students, Athens no longer feels like the safe haven they once thought it was. To ease fears, University of Georgia President Jere Morehead announced a $7.3 million campus safety initiative. The campus has been fortified by an expanded university police force, hundreds of additional lights and security cameras and multiple emergency call stations and license plate readers.
Over the past months, “there was an expectation that we would magnify those efforts,” said P. Daniel Silk, the University of Georgia’s associate vice president for public safety. “We want to be more safe and more secure tomorrow than we were yesterday.”
While the Athens community waits for justice to be delivered, students bustle around campus, walking under the newly installed street lights, passing by additional emergency call systems and easing into a heightened security presence. Classes may go on, but the campus and community are changed.
“Regardless of what the verdict is, unfortunately we still lost a student. We still lost a life and nothing’s gonna change that,” said Mawn. “Things are never going to be a hundred percent the same for any of us here.”