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Should you use a HELOC for home renovations this spring? What experts say
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If you’re looking to finance home renovations this spring, today’s high-rate environment can be a bit discouraging. Although the Fed’s series of benchmark rate hikes ended last summer, there have yet to be any rate cuts. As a result, rates on loans and credit lines are still elevated across the board. For example, the average interest rate on credit cards is 21.59% currently, up from 15.05% in 2019. Similarly, the average interest rate on a 24-month personal loan increased from 10.32% to 12.49% over the same timeframe.
But what about funding home renovations with a home equity line of credit (HELOC)? HELOCs are a viable option for many Americans as the recent spike in home values has left the average homeowner with $299,000 in home equity — $193,00 of which is tappable. As for the costs, HELOC rates are up right now compared to a few years ago but still tend to be lower than the rates on most other loan products.
To help you decide if it’s the right move for you, we asked experts about whether it makes sense to use a HELOC for spring home renovations. Here’s what you should know.
Find out what HELOC rates you could qualify for here.
Should you use a HELOC for home renovations this spring? What experts say
When deciding if you want to fund home renovations with a HELOC, here are key risks and benefits to weigh, according to experts.
“Right now, HELOCs might be the best way to pay for home renovations for most homeowners. Because most HELOCs have a variable interest rate, you may end up seeing the actual interest rate fall, as the draw period is 10 years,” says Brian Mollo, owner and chief executive officer of Trusted House Buyers.
Mollo says that if you get a HELOC now and the Fed lowers rates in the fall as predicted, the rate on your HELOC will likely come down.
In comparison, personal loans and home equity loans come with fixed rates that won’t respond to market changes.
On the flip side, HELOC rates could go up during your 10-year draw period, so it’s important that you can afford rate hikes if they do occur.
“Most analysts and policymakers have adjusted their rate cut predictions for 2024. The Fed has moved its target down to three expected rate cuts from four. To say rates can only go down from here is to say we know exactly what inflation is going to do,” says Tyler Weerden, financial planner and founder at Layered Financial.
“A rate increase for those with a variable HELOC could cause trouble. Trouble not worth having for a home renovation,” Weerden says.
Along the same vein, Mollo notes that if you’re confident in your ability to repay a HELOC, it’s not too big of a deal to take one out. However, if you’re in a volatile industry, you might want to consider a loan type that isn’t secured by your primary home.
Weerden also notes the possibility of declining home values, similar to what occurred during the 2008 financial crisis.
“The amount of credit available to you through your HELOC is directly linked to your home value. So, what happens if prices drop? In this case, the lender can reduce or even freeze your HELOC, all while you’re still required to make the payments,” he says.
Explore your top home equity loan borrowing options online now.
What to consider before taking out a HELOC
If you’re leaning toward taking out a HELOC for home renovations and plan to sell your home in the next few years, Mollo recommends evaluating the return on investment (ROI) of your projects.
“If you’re doing something like remodeling your kitchen or finishing a basement, then chances are it will probably be a wise investment. If you’re using it to make a bunch of small repairs, you might want to think about alternatives so you’re not losing money in the long run,” Mollo says.
Additionally, be sure to shop around before deciding on a HELOC lender. Rates and fees vary, so it’ll take some research to find the best deal.
The bottom line
While HELOCs come with risks, they can also be an affordable source of funds for large projects like home renovations. Whether or not the risks are worth the benefits will depend on your situation and risk tolerance.
“If you’ve been in your home for a while and have built up some equity, you might be considering a HELOC. Pouring your equity into improvements can pay off when it comes time to sell,” says Omer Reiner, realtor and president of Florida Cash Home Buyers, LLC.
“The big thing to remember when taking out a HELOC is that no matter what you spend that loan on, you are using your home as collateral, so be sure that you can afford to pay on both your first mortgage and your HELOC every month, otherwise you risk losing your home,” Reiner says.
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How to watch the Minnesota Vikings vs. Chicago Bears NFL game today: Livestream options, more
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The Minnesota Vikings will take on the Chicago Bears today. The Vikings are currently 8-2, an impressive run so far this season, and will be looking to add a fourth win to their current streak after last Sunday’s 23-13 win against the Tennessee Titans. The Bears, on the other hand, are entering this game on the heels of a four-game losing streak after a tough 20-19 loss against the Green Bay Packers last Sunday.
Here’s how and when you can watch the Vikings vs. Bears game today, whether or not you have cable.
How and when to watch the Minnesota Vikings vs. Chicago Bears
The Vikings vs. Bears game will be played on Sunday, November 24, 2024 at 1:00 p.m. ET (11:00 a.m. PT). The game will air on Fox and stream on Fubo and the platforms featured below.
How and when to watch the Minnesota Vikings vs. Chicago Bears game without cable
You can watch this week’s NFL game on Fox via several streaming services. All you need is an internet connection and one of the top options outlined below.
Fubo offers you an easy, user-friendly way to watch NFL games on CBS, Fox, NBC, ABC, ESPN, and NFL Network, plus NCAA football channels. The Pro tier includes 200+ channels and unlimited DVR, while the Elite with Sports Plus tier adds NFL RedZone and 4K resolution. New subscribers get a seven-day free trial and all plans allow streaming on up to 10 screens simultaneously.
You can watch today’s game with a subscription to Sling’s Orange + Blue tier, which includes ESPN, ABC, NBC, and Fox. The plan offers 46 channels with local NFL games, nationally broadcast games and 50 hours of DVR storage. For complete NFL coverage, add Paramount+ to get CBS games, or upgrade with the Sports Extra add-on for additional sports channels like Golf Channel, NBA TV and NFL RedZone.
Watching NFL games, including Fox broadcasts, is simple with Hulu + Live TV, which includes 90 channels, unlimited DVR storage, and access to NFL preseason games, live regular season games and studio shows. The service includes ESPN+ and Disney+ in the subscription.
Want to watch today’s game live on your smartphone? If so, NFL+ streaming service is the solution you’re looking for. It lets you watch NFL Network and out-of-market games on mobile devices, with an upgrade option to NFL+ Premium that includes NFL RedZone for watching up to eight games simultaneously. Note that NFL+ only works on phones and tablets, not TVs.
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How to watch the Detroit Lions vs. Indianapolis Colts NFL game today: Livestream options, more
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The Detroit Lions will face off against the Indianapolis Colts today. The Lions enter this game as top contenders with a near-perfect record of 9-1 so far this season. The Colts, who are 5-6 this season, could have a tough game on their hands against the Lions but will be looking to rack up another win after prevailing over the New York Jets in a tight game last Sunday.
Here’s how and when you can watch the Colts vs. Lions game today, whether or not you have cable.
Here’s how and when to watch the Detroit Lions vs. Indianapolis Colts
The Lions vs. Colts game will be played on Sunday, November 24, 2024 at 1:00 p.m. ET (11:00 a.m. PT). The game will air on Fox and stream on Fubo and the platforms featured below.
How and when to watch the Detroit Lions vs. Indianapolis Colts game without cable
You can watch this week’s NFL game on Fox via several streaming services. All you need is an internet connection and one of the top options outlined below.
Experience NFL action like never before with Fubo’s comprehensive sports streaming platform. From Sunday showdowns to primetime matchups, catch every NFL game across major networks including CBS, Fox, NBC, ABC, ESPN and NFL Network. Choose the Pro package to unlock 200+ channels and limitless DVR storage, or elevate your game-day experience with the Elite with Sports Plus package, featuring NFL RedZone’s commercial-free scoring highlights and stunning 4K quality.
Test drive the service with a no-commitment seven-day free trial, and share the excitement with family and friends — Fubo supports simultaneous streaming on up to 10 devices, so everyone can watch their favorite teams.
You can watch today’s game with a subscription to Sling’s Orange + Blue tier, which includes ESPN, ABC, NBC, and Fox. The plan offers 46 channels with local NFL games, nationally broadcast games, and 50 hours of DVR storage. For complete NFL coverage, add Paramount+ to get CBS games, or upgrade with the Sports Extra add-on for additional sports channels like Golf Channel, NBA TV and NFL RedZone.
Watching NFL games, including Fox broadcasts, is simple with Hulu + Live TV, which includes 90 channels, unlimited DVR storage, and access to NFL preseason games, live regular season games and studio shows. The service includes ESPN+ and Disney+ in the subscription.
Want to watch today’s game live on your smartphone? If so, NFL+ streaming service is the solution you’re looking for. It lets you watch NFL Network and out-of-market games on mobile devices, with an upgrade option to NFL+ Premium that includes NFL RedZone for watching up to eight games simultaneously. Note that NFL+ only works on phones and tablets, not TVs.