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3 smart home equity moves to make before the Fed’s April Meeting
When making smart financial decisions, timing plays a key role. Those homeowners who refinanced their mortgage in 2020 and 2021 — or those buyers who purchased a home then — can attest to this as mortgage rates have more than doubled since. For current owners looking for an extra source of financing, meanwhile, now may be a good time to tap into their home equity.
With inflation still stubborn and interest rates stuck at their highest points in decades, home equity borrowing is one of the more cost-effective ways to access extra money. And with the next Federal Reserve meeting scheduled for April 30 and an announcement on the future of rate hikes to be released the following day, many may want to act now. Below, we’ll break down three smart home equity moves homeowners should consider making before the Fed’s April meeting.
Start by reviewing your home equity loan options online today.
3 smart home equity moves to make before the Fed’s April meeting
Here are three smart home equity moves to consider before the Fed’s next rate announcement.
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Optimism was high at the start of 2024 that this inflationary cycle was permanently cooling and that rate cuts would soon be coming. But a series of disappointing inflation reports since January 1 have cooled that optimism, and now rate hikes are back as a possibility. Understanding this, and the effect it will have on home equity borrowing, owners who know they want to access their equity should get started before any Fed announcement adversely affects today’s lower rates.
There’s no downside to locking in a home equity loan rate today. If rates go up next week and in May, owners will already have a lower option. And if they stay the same or drop later in the year, owners can always refinance their loan to the lower rate at that point.
Get started with a home equity loan here now.
Choose a home equity loan over a HELOC
A home equity loan has a fixed interest rate that will remain the same for the duration of the loan (unless refinanced). A home equity line of credit (HELOC), meanwhile, has a variable rate that will adjust based on the Fed’s moves and overall market conditions. That can be favorable if rates are trending downward but, right now, that doesn’t appear to be the case.
And, taking out a HELOC with the strong possibility of rate increases could quickly become problematic and difficult to pay back for many homeowners. So, for many, it’s smarter to take out a home equity loan instead of a HELOC.
Only borrow what you need
It’s always smart to only borrow what you need but in today’s climate, it’s particularly important to take this cautious approach. Even if you pursue a home equity loan, with its fixed rate, inflation and interest rates are still making the cost of everyday purchases and daily borrowing difficult for many.
Against this backdrop, you’ll want to avoid borrowing more than you actually need, especially when using a home equity loan, which utilizes your home as collateral. So, only borrow a precise amount. With the potential for interest rate cuts low now, you’ll want to make sure that you’re keeping your borrowing as tight as possible.
The bottom line
With a new Federal Reserve meeting just days away and the potential for changes to the rate climate high, homeowners considering using their equity should take a smart and nuanced approach. They’ll want to get started now, before rates potentially become prohibitive, and most will want to lock in a home equity loan rate versus the volatility that HELOC rates come with. Finally, by taking the traditional approach of only borrowing what they need, homeowners will improve their chances of paying back their loans in a timely manner, which is especially important in today’s still fluctuating rate climate.
Considering tapping into your home equity now? Learn more here.
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Saturday is the winter solstice and 2024’s shortest day. Here’s what to know about the official start of winter.
The 2024 winter solstice, the shortest day of the year, happens on Saturday, Dec. 21, in the Northern Hemisphere. The celestial event signifies the first day of winter, astronomically.
What is the winter solstice?
The winter solstice is the day each year that has the shortest period of daylight between sunrise and sunset, and therefore the longest night. It happens when the sun is directly above the Tropic of Capricorn, a line of latitude that circles the globe south of the equator, the National Weather Service explains.
The farther north you are, the shorter the day will be, and in the Arctic Circle, the sun won’t rise at all.
How is the day of the winter solstice determined?
The winter solstice occurs because of the Earth’s tilt as it rotates around the sun.
When the Northern Hemisphere tilts away from the sun, the nights last longer. The longest night happens on the solstice because the hemisphere is in its furthest position from the sun. That occurs each year on Dec. 21 or 22.
This year, it falls on Dec. 21 at 4:21 a.m ET, to be precise.
On the summer solstice, when the northern tilt is closest to the sun, we have the longest day, usually June 20 or 21.
The solstices are not always exactly on the 21st every year because the earth’s rotation around the sun is 365.25 days, instead of 365 even.
Will days start getting longer after the winter solstice?
Yes. Each day after the solstice, we get one minute more of sunlight. It doesn’t sound like much, but after just two months, or around 60 days, we’ll be seeing about an hour more of sunlight.
When will winter officially be over in 2025?
The meteorological winter ends on March 20, 2025. Then, spring will last until June 20, when the summer solstice arrives.
How is the winter solstice celebrated around the world?
Nations and cultures around the world have celebrated the solstice since ancient times with varying rituals and traditions. The influence of those solstice traditions can still be seen in our celebrations of holidays like Christmas and Hanukkah, Britannica notes.
The ancient Roman Saturnalia festival celebrated the end of the planting season and has close ties with modern-day Christmas. It honored Saturn, the god of harvest and farming. The multiple-day affair had lots of food, games and celebrations. Presents were given to children and the poor, and slaves were allowed to stop working.
Gatherings are held every year at Stonehenge, a monumental circle of massive stones in England that dates back about 5,000 years. The origins of Stonehenge are shrouded in mystery, but it was built to align with the sun on solstice days.
The Hopi, a Native American tribe in the northern Arizona area, celebrate the winter solstice with dancing, purification and sometimes gift-giving. A sacred ritual known as the Soyal Ceremony marks the annual milestone.
In Peru, people honor the return of the sun god on the winter solstice. The ancient tradition would be to hold sacrificial ceremonies, but today, people hold mock sacrifices to celebrate. Because Peru is in the Southern Hemisphere, their winter solstice happens in June, when the Northern Hemisphere is marking its summer solstice.
Scandinavia celebrates St. Lucia’s Day, a festival of lights.
The “arrival of winter,” or Dong Zhi, is a Chinese festival where family gathers to celebrate the year so far. Traditional foods include tang yuan, sweet rice balls with a black sesame filling. It’s believed to have its origins in post-harvest celebrations.
Researchers stationed in in Antarctica even have their own traditions, which may include an icy plunge into the polar waters. They celebrate “midwinter” with festive meals, movies and sometimes homemade gifts.
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