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Is a home equity loan or HELOC the better way to borrow $100,000?
In the first quarter of 2024, the average home equity withdrawl in the United States was $100,000, according to the June ICE Mortgage Monitor report. So, if you’re considering tapping into $100,000 worth of your equity, you’re not alone. And, you have multiple options to access it. If you want to maintaining your current mortgage rate, home equity loans and home equity lines of credit (HELOC) are viable ways to do so.
Home equity loans work like mortgages. They offer lump-sum financing and fixed interest and payments. On the other hand, a HELOC is a credit line that gives you flexible access to your equity. And, in exchange for that flexibility, you’ll typically need to agree to variable interest and payments.
But, which of these two options is the best way to tap into $100,000 worth of your equity right now? That’s what we will break down below.
Find out how affordable it can be to borrow $100,000 against your home equity now.
Is a home equity loan or HELOC the better way to borrow $100,000?
If you’re interested in borrowing $100,000 against your equity and you’re torn between a home equity loan and a HELOC, it’s important to consider your needs and expectations. Here’s when each option may be better for you:
When a home equity loan is the better way to borrow $100,000
A home equity loan may be the better way to borrow $100,000 if you know you won’t need to access equity in the future and you’re looking for a fixed, predictable payment. “A home equity loan is a lump sum loan that you receive all at once,” explains Matthew Teifke, founder of the Texas-specific real estate acquisition fund, TR3. And, “because the interest rate and payments are fixed, you have a predictable payment schedule.”
According to Tiefke, home equity loans are “ideal for one-time expenses such as home improvements, debt consolidation, or major purchases.”
You should also think about how long you’ll take to pay the money back when you choose between a home equity loan and HELOC to access $100,000 of your equity. “In my opinion, timeframe is important when deciding between a HELOC or a home equity loan,” explains Denise Supplee, co-founder of SparkRental, an investing educational platform. “Home equity loans are probably better, at least currently, for longer terms and larger amounts since the interest rates tend to be fixed.”
Take advantage of the benefits of a home equity loan today.
When a HELOC is the better way to borrow $100,000
“A HELOC works like a credit card,” says Teifke. “You have a credit limit and can borrow as much as you need up to that limit, repay it, and borrow it again.” That is, “during the draw period (usually 5 to 10 years).”
It’s worth noting that a HELOC “typically has a variable interest rate, which can change over time,” says Teifke. But, the flexibility of these equity borrowing options make them “ideal for ongoing expenses or projects where you need access to funds over a period of time,” he says.
“The HELOC may be good for short term or temporary loans as they are easier to secure,” says Supplee. But keep in mind that “the HELOC is variable and current interest rates are nowhere near stable.” So, if you plan to pay back the money over the long-term, you may want to opt for a home equity loan. But, if you expect to pay it back soon, a HELOC may be the way to go. “For instance, perhaps you are waiting for funds and an unexpected expense such as a home repair comes along. It is easy to tap into a HELOC and then pay it off completely as soon as your funds come through.”
Take advantage of the flexibility a HELOC has to offer today.
The bottom line
Home equity loans and HELOCs are both effective ways to tap into your equity. The better one for you depends on your needs. If you’re looking for long-term financing and want predictable payments, a home equity loan may be the better way to borrow $100,000. If you’re looking for short-term financing and need flexible access to your equity, a HELOC may be your better option. Chat with a home equity expert now to learn more about ways to tap into your equity.
CBS News
Biden’s top hostage envoy Roger Carstens in Syria to ask for help in finding Austin Tice
Roger Carstens, the Biden administration’s top official for freeing Americans held overseas, on Friday arrived in Damascus, Syria, for a high-risk mission: making the first known face-to-face contact with the caretaker government and asking for help finding missing American journalist Austin Tice.
Tice was kidnapped in Syria 12 years ago during the civil war and brutal reign of now-deposed Syrian dictator Bashar al-Assad. For years, U.S. officials have said they do not know with certainty whether Tice is still alive, where he is being held or by whom.
The State Department’s top diplomat for the Middle East, Barbara Leaf, assistant secretary of state for Near Eastern Affairs, accompanied Carstens to Damascus as a gesture of broader outreach to Hay’at Tahrir al-Sham, known as HTS, the rebel group that recently overthrew Assad’s regime and is emerging as a leading power.
Near East Senior Adviser Daniel Rubinstein was also with the delegation. They are the first American diplomats to visit Damascus in over a decade, according to a State Department spokesperson.
They plan to meet with HTS representatives to discuss transition principles endorsed by the U.S. and regional partners in Aqaba, Jordan, the spokesperson said. Secretary of State Antony Blinken traveled to Aqaba last week to meet with Middle East leaders and discuss the situation in Syria.
While finding and freeing Tice and other American citizens who disappeared under the Assad regime is the ultimate goal, U.S. officials are downplaying expectations of a breakthrough on this trip. Multiple sources told CBS News that Carstens and Leaf’s intent is to convey U.S. interests to senior HTS leaders, and learn anything they can about Tice.
Rubinstein will lead the U.S. diplomacy in Syria, engaging directly with the Syrian people and key parties in Syria, the State Department spokesperson added.
Diplomatic outreach to HTS comes in a volatile, war-torn region at an uncertain moment. Two sources even compared the potential danger to the expeditionary diplomacy practiced by the late U.S. Ambassador Christopher Stevens, who led outreach to rebels in Benghazi, Libya, in 2012 and was killed in a terrorist attack on a U.S. diplomatic compound and intelligence post.
U.S. special operations forces known as JSOC provided security for the delegation as they traveled by vehicle across the Jordanian border and on the road to Damascus. The convoy was given assurances by HTS that it would be granted safe passage while in Syria, but there remains a threat of attacks by other terrorist groups, including ISIS.
CBS News withheld publication of this story for security concerns at the State Department’s request.
Sending high-level American diplomats to Damascus represents a significant step in reopening U.S.-Syria relations following the fall of the Assad regime less than two weeks ago. Operations at the U.S. embassy in Damascus have been suspended since 2012, shortly after the Assad regime brutally repressed an uprising that became a 14-year civil war and spawned 13 million Syrians to flee the country in one of the largest humanitarian disasters in the world.
The U.S. formally designated HTS, which had ties to al Qaeda, as a foreign terrorist organization in 2018. Its leader, Mohammed al Jolani, was designated as a terrorist by the US in 2013 and prior to that served time in a US prison in Iraq.
Since toppling Assad, HTS has publicly signaled interest in a new more moderate trajectory. Al Jolani even shed his nom de guerre and now uses his legal name, Ahmed al-Sharaa.
U.S. sanctions on HTS linked to those terrorist designations complicate outreach somewhat, but they haven’t prevented American officials from making direct contact with HTS at the direction of President Biden. Blinken recently confirmed that U.S. officials were in touch with HTS representatives prior to Carstens and Leaf’s visit.
“We’ve heard positive statements coming from Mr. Jolani, the leader of HTS,” Blinken told Bloomberg News on Thursday. “But what everyone is focused on is what’s actually happening on the ground, what are they doing? Are they working to build a transition in Syria that brings everyone in?”
In that same interview, Blinken also seemed to dangle the possibility that the U.S. could help lift sanctions on HTS and its leader imposed by the United Nations, if HTS builds what he called an inclusive nonsectarian government and eventually holds elections. The Biden administration is not expected to lift the U.S. terrorist designation before the end of the president’s term on January 20th.
Pentagon spokesperson Pat Ryder disclosed Thursday that the U.S. currently has approximately 2,000 US troops inside of Syria as part of the mission to defeat ISIS, a far higher number than the 900 troops the Biden administration had previously acknowledged. There are at least five U.S. military bases in the north and south of the country.
The Biden administration is concerned that thousands of ISIS prisoners held at a camp known as al-Hol could be freed. It is currently guarded by the Syrian Democratic forces, Kurdish allies of the U.S. who are wary of the newly-powerful HTS. The situation on the ground is rapidly changing since Russia and Iran withdrew military support from the Assad regime, which has reset the balance of power. Turkey, which has been a sometimes problematic U.S. ally, has been a conduit to HTS and is emerging as a power broker.
A high-risk mission like this is unusual for the typically risk averse Biden administration, which has exercised consistently restrained diplomacy. Blinken approved Carstens and Leaf’s trip and relevant congressional leaders were briefed on it days ago.
“I think it’s important to have direct communication, it’s important to speak as clearly as possible, to listen, to make sure that we understand as best we can where they’re going and where they want to go,” Blinken said Thursday.
At a news conference in Moscow Thursday, Russian President Vladimir Putin said he had not yet met with Assad, who fled to Russia when his regime fell earlier this month. Putin added that he would ask Assad about Austin Tice when they do meet.
Tice, a Marine Corps veteran, worked for multiple news organizations including CBS News.
CBS News
12/19: CBS Evening News – CBS News
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Delivering Tomorrow: talabat’s Evolution in the Middle East
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