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4 home equity mistakes to avoid this July
Home equity borrowing can be a smart way to access large sums of money, especially now when interest rates on alternative borrowing options are much higher. In today’s rate climate, specifically, both home equity loans and home equity lines of credit (HELOCs) come with significantly lower rates than personal loans and credit cards. And they often come with much larger sums of money that borrowers can access.
Like all financial products and services, however, there are some easy-to-make mistakes that home equity borrowers should carefully avoid. These are particularly important to avoid when borrowing equity as the home serves as collateral in these scenarios and owners could lose their property if they don’t pay back all that they’ve borrowed. But the mistakes to avoid in a different time and climate don’t always apply to this form of borrowing. To that end, below we’ve gathered some timely home equity mistakes to avoid this July.
Start by seeing what home equity loan interest rate you’re eligible for here.
4 home equity mistakes to avoid this July
Ready to tap into your home equity now? Then be sure to avoid these mistakes before doing so.
Waiting for home values to rise
Home values are high right now with the average homeowner having around $300,000 of home equity to potentially utilize. But home values, and therefore home equity, can change over time. If the value of your home drops, for example, in the face of poor economic conditions, then your available equity will, too.
And considering that today’s home equity levels are near record highs, it would be a mistake for most homeowners to wait for values to rise even further. Instead, consider acting now while you have a significant amount of financing available.
See how much home equity you could tap into here now.
Choosing a home equity loan over a HELOC
It may be tempting to choose a home equity loan over a HELOC right now thanks to the former’s slightly lower interest rate. But that could be a mistake with a cut to the federal funds rate looming. If that does occur, rates that lenders offer borrowers will drop, too.
And home equity loans have fixed rates, meaning you’ll need to refinance to get the new, better rate. HELOCs, however, have variable rates subject to change over time. So it’s probably better to go with this option, pay slightly more to start, but then be positioned for a lower rate when rates start to drop.
Not shopping around
It’s always an error to not shop around when looking for the most cost-effective borrowing option, but particularly now. Remember that the federal funds rate doesn’t directly dictate what lenders will offer borrowers. Accordingly, some have already started lowering rates on their products in anticipation of a formal rate cut to come. But you’ll need to shop around to find these lower-rate options. And that may involve using a different lender than the one who currently finances your mortgage loan.
Start shopping for home equity loan lenders here now.
Not monitoring the rate climate
The interest rate climate is constantly changing, particularly now that inflation has been cooling month-to-month. But a tick-up in the inflation rate (the next report comes out July 11) could affect rates on lending products. And the next Fed meeting (scheduled to begin July 30) could as well. So borrowers should carefully monitor the rate climate in July, especially on these dates, so that they’re better prepared to take advantage of any positive rate news when it’s announced.
The bottom line
Home equity borrowing is particularly beneficial now, thanks to lower rates than most alternatives and higher amounts of financing to utilize. But borrowers will need to take a strategic and nuanced approach to truly capitalize. This extends to the avoidance of simple but timely mistakes like waiting for home values to rise further, choosing a home equity loan over a HELOC, not shopping around to find the best (and cheapest) option and not monitoring the rare climate for timely opportunities. By skipping these mistakes now, borrowers will position themselves for home equity financial success both this July through the time their loan is fully paid off.
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Putin just approved a new nuclear weapons doctrine for Russia. Here’s what it means.
Russian President Vladimir Putin approved changes to his country’s nuclear doctrine this week, formally amending the conditions — and lowering the threshold — under which Russia would consider using its nuclear weapons. Moscow announced Tuesday that Putin had signed off on the changes to the doctrine, formally known as “The basics of state policy in the field of nuclear deterrence,” as Ukraine launched its first strike deeper into Russia using U.S.-supplied missiles.
The updated doctrine states that Russia will treat an attack by a non-nuclear state that is supported by a country with nuclear capabilities as a joint attack by both. That means any attack on Russia by a country that’s part of a coalition could be seen as an attack by the entire group.
Under the doctrine, Russia could theoretically consider any major attack on its territory, even with conventional weapons, by non-nuclear-armed Ukraine sufficient to trigger a nuclear response, because Ukraine is backed by the nuclear-armed United States.
Putin has threatened to use nuclear weapons in Ukraine multiple times since he ordered the full-scale invasion of the country on Feb. 24, 2022, and Russia has repeatedly warned the West that if Washington allowed Ukraine to fire Western-made missiles deep into its territory, it would consider the U.S. and its NATO allies to be directly involved in the war.
U.S. officials said Ukraine fired eight U.S.-made ATACMS missiles into Russia’s Bryansk region early Tuesday, just a couple days after President Biden gave Ukraine permission to fire the weapons deeper into Russian territory. ATACMS are powerful weapons with a maximum range of almost 190 miles.
“This is the latest instance of a long string of nuclear rhetoric and signaling that has been coming out of Moscow since the beginning of this full scale invasion,” Mariana Budjeryn, Senior Research Associate at Harvard’s Belfer Center, told German broadcaster Deutsche Welle when the change to Russia’s nuclear doctrine was first proposed last month.
“The previous version of the Russian doctrine adopted in 2020 allowed also a nuclear response to a large-scale conventional attack, but only in extreme circumstances where the very survival of the state was at stake,” Budjeryn noted. “This formulation has changed to say, well, extreme circumstances that jeopardize the sovereignty of Russia. Well, what does that really mean and who defines what serious threats to sovereignty might constitute?”
Budjeryn said Russia had already used weapons against Ukraine that could carry a nuclear payload.
“Russia has been using a number of delivery systems of missiles that [can] also come with a nuclear warhead. So these are dual capable systems. For example, Iskander M short range ballistic missiles. Those have been used extensively in this war by Russia. So when we have an incoming from Russia to Ukraine and we see that it’s an Iskander missile, we don’t know if it’s nuclear tipped or conventionally tipped,” Budjeryn said.
Ukrainian parliamentarian Oleksandra Ustinova, who says she helped lobby the Biden administration for the permission for Ukraine to fire the ATACMS deeper inside Russia, told CBS News she didn’t believe Putin would actually carry out a nuclear strike.
“He keeps playing and pretending like he’s going to do something,” Ustinova said. “I’ve been saying since day one that he’s a bully, and he’s not going to do that.”
contributed to this report.
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In 1967, Louisa Dunne was found murdered in her U.K. home by a neighbor. A suspect has just been arrested.
A 92-year-old man has been charged in the U.K. with the murder and rape of a woman almost six decades ago, British police said Wednesday.
Louisa Dunne, 75, was found dead by a neighbor inside her home in the southwestern English city of Bristol on June 28, 1967.
Her cause of death was recorded as strangulation and asphyxiation.
The case remained cold for 57 years until nonagenarian Ryland Headley, of Ipswich in eastern England, was arrested on Tuesday and subsequently charged.
The arrest came after Avon and Somerset police began reviewing the case last year, which included further forensic examination of items relating to the case.
“This development marks a hugely significant moment in this investigation,” the force’s detective inspector Dave Marchant said in a statement. “We’ve updated Louisa’s family about this charging decision and a specialist liaison officer will continue to support them in the coming days, weeks and months.”
Marchant said the public may see “operational police activity in the Ipswich area” as a result of the arrest, the BBC reported.
“We recognise this will also come as a shock to the community in Easton,” Marchant said.
Headley appeared in court in Bristol via video-link on Wednesday and was remanded in custody. He was not asked to enter pleas to the two charges. Headley spoke only to confirm his name, date of birth and address, according to the BBC.
ITV News noted the case is believed to be the oldest cold case murder arrest in British history.
Police did not give details about the new forensic analysis in the case but DNA and genetic genealogy tests are often keys to solving decades-old cold cases. Just last week, investigators in the U.S. announced that they used DNA evidence to solve a 65-year-old cold case involving a 7-year-old boy whose body was found in a culvert.