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7 tips for getting the best HELOC rates this spring
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As the winter comes to an end and the spring season unfolds, many homeowners plan to take on home projects to improve or repair their homes — or simply ensure that the home works better for their needs. But while home renovations and repairs are a great way to ensure that you’re protecting your investment and boosting the equity in your home, they can also be costly.
For example, the average bathroom remodel currently costs about $11,000 to complete. But depending on where you live, the size of your project, the materials and labor and other factors, the price for this project could range from $2,500 to $80,000 — and that price tag may be out of reach for your average homeowner.
The good news is that if you’re planning a home renovation for the coming months — or if you’re planning to pay down debt or make another large purchase — you don’t have to cover the costs in cash. A home equity line of credit (HELOC) can be a powerful tool in achieving these objectives, offering flexible borrowing against the equity built in your home. To make the most of this financial opportunity, though, it’s crucial to secure the best HELOC rate possible. Below, we’ll break down some tips to guide you through the process.
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7 tips for getting the best HELOC rates this spring
Getting the best HELOC rate possible can result in big savings on the money you borrow. As you search for a home equity line of credit, consider the following:
Keep an eye on your credit score and credit history
Before diving into the HELOC application process, it can be beneficial to take the time to review your credit score and history. Lenders use this information to assess your creditworthiness, which influences the interest rate you’ll be offered.
If possible, aim for a credit score of 700 or higher to increase your chances of securing competitive rates. If your score is lower, consider taking steps to improve it, such as paying down outstanding debts and addressing any errors on your credit report.
Learn more about the best HELOC rates available to you today.
Compare offers from multiple lenders
Don’t settle for the first HELOC lender that crosses your path. Explore a variety of lender types, including traditional banks, credit unions and online lenders, as each may have its own set of terms, conditions and rates.
And, be sure to compare a range of offers, looking at not just interest rates, but the fees, repayment terms and customer reviews for each option. Completing a thorough comparison of your lender options can help you identify the one that aligns best with your financial goals and offers the most favorable HELOC terms.
Understand the loan-to-value (LTV) ratio
The LTV ratio of your home plays a significant role in determining your HELOC rates. This ratio represents the percentage of your home’s appraised value that you can borrow against.
To secure better rates on your HELOC, it can help to aim for a lower LTV ratio — which can be done by making extra mortgage payments, completing a new appraisal to assess the property appreciation in value or making home improvements — or a combination of the three.
Ensure that you have enough equity
One of the key factors influencing your eligibility for a HELOC — and the interest rates you’re offered — is the amount of equity in your home. Lenders typically require a minimum level of equity, often around 20%, to approve you for a HELOC.
So, ensure that you have enough equity to meet the lender’s criteria — and, if possible, find ways to increase that equity to potentially qualify for more favorable rates. The process of increasing your equity is similar to lowering your LTV ratio. You can typically do this by paying down your mortgage or improving your home, which, in turn, can enhance your chances of securing the best HELOC terms.
Inquire about rate caps
When considering a HELOC, which comes with a variable interest rate, it’s essential to inquire about rate caps. Rate caps limit how much your interest rate can increase over a specific period, protecting you from drastic spikes in payments.
Understanding the rate caps associated with a HELOC can provide you with peace of mind and financial stability, especially in a market where interest rates may fluctuate. And, choosing a HELOC with the right rate cap can also keep your future HELOC rate from being higher than you expected (or can afford).
Negotiate the terms and fees
Don’t be afraid to negotiate with lenders. While low interest rates are an important factor, be sure to also pay attention to the terms and fees associated with the HELOC. Some lenders may be open to waiving or reducing certain fees, such as application fees or closing costs. Negotiating these terms can result in substantial savings over the life of the loan.
Demonstrate a stable financial picture
Lenders typically prefer borrowers who demonstrate financial stability, so ensure your employment history is robust, you can showcase a steady income and keep your debt-to-income (DTI) ratio in check. Stability in these areas can improve your overall creditworthiness and enhance your chances of securing the best HELOC rates.
The bottom line
Securing the best HELOC rates this spring requires a combination of careful preparation, thorough research and effective negotiation. By understanding your financial position, exploring multiple lenders, looking for rate caps and paying attention to key factors like credit score, loan-to-value ratio and equity, you can unlock the full potential of a HELOC and embark on your financial journey with confidence.
NEW YORK — Former New York Gov. David Paterson and his stepson were attacked in New York City on Friday night, authorities said.
The incident occurred just before 9 p.m. on Second Avenue near East 96th Street on the Upper East Side, according to the New York City Police Department.
Police said officers were sent to the scene after an assault was reported. When officers arrived, police say they found a 20-year-old man suffering from facial injuries and a 70-year-old man who had head pain. Both victims were taken to a local hospital in stable condition.
In a statement, a spokesperson for the former governor said the two were attacked while “taking a walk around the block near their home by some individuals that had a previous interaction with his stepson.”
The spokesperson said that they were injured “but were able to fight off their attackers.”
Both were taken to Cornell Hospital “as a precaution,” he added.
Police said no arrests have been made and the investigation is ongoing.
The 70-year-old Paterson, a Democrat, served as governor from 2008 to 2010, stepping into the post after the resignation of Eliot Spitzer following his prostitution scandal. He made history at the time as the state’s first-ever Black and legally blind governor.
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A 17-year-old boy was critically injured and a person is in custody after a gunman opened fire on a SEPTA bus in North Philadelphia Friday evening, police said.
At around 6:15 p.m., Philadelphia police were notified about a shooting on a SEPTA bus traveling on Allegheny Avenue near 3rd and 4th streets in North Philadelphia, Inspector D F Pace told CBS News Philadelphia.
There were an estimated 30 people on the bus at the time of the shooting, Pace said, but only the 17-year-old boy was believed to have been shot. Investigators said they believe it was a targeted attack on the teenager and that he was shot in the back of the bus at close range.
According to Pace, the SEPTA bus driver alerted a control center about the shooting, which then relayed the message to Philadelphia police, who responded to the scene shortly.
Officers arrived at the scene and found at least one spent shell casing and blood on the bus, but no shooting victim, Pace said. Investigators later discovered the 17-year-old had been taken to Temple University Hospital where he is said to be in critical condition, according to police.
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Through their preliminary investigation, police learned those involved in the SEPTA shooting may have fled in a silver-colored Kia.
Authorities then found a car matching the description of the Kia speeding in the area and a pursuit began, Pace said. Police got help from a PPD helicopter as they followed the Kia, which ended up crashing at 5th and Greenwood streets in East Mount Airy. Pace said the Kia crashed into a parked car.
The driver of the crashed car ran away but police were still able to take them into custody, Pace said.
Investigators believe there was a second person involved in the shooting who ran from the car before it crashed. Police said they believe this person escaped near Allegheny Avenue and 4th Street, leaving a coat behind.
According to Pace, police also found a gun and a group of spent shell casings believed to be involved in the shooting in the same area.
“It’s very possible that there may have been a shooting inside the bus and also shots fired from outside of the bus toward the bus,” Pace said, “We’re still trying to piece all that together at this time.”
This is an active investigation and police are reviewing surveillance footage from the SEPTA bus.