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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.
Ready to get started? Explore your top HELOC options online now.
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.
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Floods, landslides struck parts of Bosnia as residents slept, leaving at least 16 dead and several missing
A severe rainstorm struck Bosnia overnight Friday, killing at least 16 people in floods and landslides in several towns and villages in central and southern parts of the country, with surging waters rushing into people’s homes as they were sleeping.
Rescue services in the south said several people were missing and called on volunteers and the army to assist as roads were closed and houses left without electricity.
Josip Kalem, a resident of Fojnica, one of the towns hit by the floods, said his dog’s barking woke him up at around 4 a.m. When he came out on the terrace, he saw the water rising rapidly.
“I came down, woke up my wife, and we looked around, we could not get out of the house. We saw more and more water coming in,” he said. “All of a sudden, the water was flooding the garage, basement, my car — everything. The water swept it all away, including my dog. Flood took it downstream.”
Andja Milesic, another resident of Fojnica, also said she was caught by surprise in the middle of the night.
“When I woke up, my bedroom floor was already soaked. I walked into the hallway — water was everywhere — the living room, everywhere,” she said. “It was horrible.”
Armin Durgut / AP
Darko Juka, a spokesman for the local administration, said at least 14 people had died in and around the southern town of Jablanica. Officials later said two more bodies have been found.
“Those are the ones who have been discovered by rescuers,” he said. “We still don’t know the final death toll.”
“I don’t remember such a crisis since the war,” Juka said referring to the 1992-95 war in Bosnia that left the country in ruins. “The scale of this chaotic situation is harrowing.”
Defense Minister Zukan Helez told N1 regional television that troops have been engaged to help and that the casualties were reported.
Helez said that “hour after hour we are receiving news about new victims. … Our first priority is to save the people who are alive and buried in houses where the landslides are.”
A pregnant woman lost her baby after she was rescued from the floods and transferred to a hospital in the regional center of Mostar. Authorities said doctors were fighting for her life as well. Separately, a child was successfully rescued and hospitalized, local officials said.
Rescue services in the towns of Jablanica and Kiseljak said the power was off overnight and mobile phones lost their signal.
The Jablanica fire station said that the town was completely inaccessible because roads and trainlines were closed.
“The police informed us that the railroad is also blocked,” the state rescue service said in a statement. “You can’t get in or out of Jablanica at the moment. Landline phones are working, but mobile phones have no signal.”
It urged people not to venture out on the flooded streets.
Human-caused climate change increases the intensity of rainfall because warm air holds more moisture. This summer, the Balkans were also hit by long-lasting record temperatures, causing a drought. Scientists said the dried-out land has hampered the absorption of floodwaters.
Armin Durgut / AP
Drone footage broadcast on Bosnian media showed villages and towns completely submerged under water, while videos on social networks showed dramatic scenes of muddy torrents and damaged roads.
One of the busiest roads linking Sarajevo with the Adriatic coast via Jablanica was swept into a river, together with a railway line in a huge landslide, according to photos.
“Many people are endangered because of big waters and landslides. There is information about victims and many injured and missing persons,” said the civic protection service.
Authorities urged people to stay on the upper floors of their homes. Reports said surging waters swept away domestic animals and cars as the water swiftly filled up lower floors of buildings.
The heavy rains and strong winds were also reported in neighboring Croatia, where several roads were closed and the capital of Zagreb prepared for the swollen Sava River to burst its banks.
Heavy winds have hampered traffic along the southern coast of the Adriatic Sea, and flash floods caused by heavy rain threatened several towns and villages in Croatia.
Floods caused by torrential rains were also reported in Montenegro, south of Bosnia, where some villages were cut off and roads and homes flooded.
In 2014, floodwaters triggered more than 3,000 landslides across the Balkans, laying waste to entire towns and villages and disturbing land mines leftover from the region’s 1990s war, along with warning signs that marked the unexploded weapons.
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