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Why you should use a HELOC to pay for big expenses now
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Home equity can provide homeowners the financing they need and, right now, there’s a lot of equity to utilize. With the average homeowner sitting on approximately $300,000 worth of equity today, many may want to use this unique form of financing to pay for big expenses now.
And there are a variety of ways in which they can do so.
From home equity loans to home equity lines of credit (HELOCs) to cash-out refinancing and reverse mortgages, there’s no shortage of ways for owners to access their equity. But while each of those will come with its own set of pros and cons, there’s a compelling case to be made for using a HELOC over the others now.
Functioning like a credit card, this home equity borrowing option can be used to pay for a variety of big expenses from weddings to college education to outstanding debt. And, if you’ve already decided that home equity is the best financing form for you, then it helps to know the timely benefits of using a HELOC now. Below, we’ll break down three of them.
Start by seeing what HELOC interest rate you’re eligible for here.
Why you should use a HELOC to pay for big expenses now
Not sure if a HELOC is the best way to finance major expenses now? Here are three compelling reasons why it may be:
Lower interest rates than alternatives
Credit card interest rates are in the low 20s right now while the average personal loan rate hovers around 12%. But HELOCs are still in the single digits, even in today’s elevated rate climate. The average HELOC rate is just 9.18% right now, multiple points lower than popular alternatives. And while that’s slightly higher than today’s average 8.59% home equity loan interest rate, the negligible difference between the two could soon prove to be a moot point in today’s evolving rate climate.
Learn more about your HELOC options online now.
The potential for those rates to fall further
Simply put: HELOC interest rates are variable. Home equity loan rates are not. While this is a major disadvantage in an economy in which rates are heading upward, it’s a distinct advantage now that interest rate cuts appear imminent. While credit card interest rates are also variable and subject to change, they’re more than double what HELOC rates are now, and the difference between the two will likely remain the same even as rates start to fall. But a HELOC, which is already cheap, could become cheaper as soon as September.
No need for refinancing
While a lower home equity loan interest rate could be tempting now, it may not be worth it, even with the slight savings. As mentioned above, rates on home equity loans are fixed and will require refinancing to secure a lower rate. HELOCs, however, will automatically adjust (typically once per month). Additionally, because a refinance won’t be required to secure a lower HELOC rate, borrowers will save on refinancing closing costs that they otherwise would have had to pay with the home equity loan counterpart. And in the face of multiple interest rate cuts ahead, it’s arguably better to use a HELOC instead of a home equity loan now.
The bottom line
If you have expenses worth thousands or tens of thousands of dollars, a HELOC could be the smart and effective way to pay for them now. HELOCs come with significantly lower interest rates than popular alternatives and, inherently, the ability for those rates to adjust further downward later this year and into 2025. And, unlike home equity loans, borrowers won’t need to pay to refinance to the better rate as the HELOC will just change automatically.
When considering the use of home equity, however, no matter the form, it’s critical to weigh the pros and cons of each borrowing type, as your home will serve as collateral in these circumstances and you could potentially lose it if you can’t afford to repay all that you’ve borrowed.
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A so-called “doomsday fish” has washed up on a Southern California beach — typically an extremely rare occurrence, but this is the second time this year it has happened. The rare oarfish found on Grandview Beach in Encinitas measured roughly 9 to 10 feet and was spotted by a doctoral candidate at Scripps Institute of Oceanography, the school wrote on social media.
The doomsday fish got its name because it looks like a mythical sea creature, with a long, ribbon-shaped body that can grow up to 30 feet, according to Ocean Conservancy.
After doctoral candidate Alison Laferriere found the odd-looking fish — which resembles a larger-than-normal eel with a monstrous face — Ben Frable, manager of the Scripps Oceanography Marine Vertebrate Collection, contacted the NOAA Fisheries Service team to bring the animal to its Southwest Fisheries Science Center.
This oarfish is smaller than the one found in La Jolla in August 2024. Researchers are not yet sure why the rare fish has washed up on California beaches recently, and there have been few studies on the species.
Only 20 oarfish have washed up in California since 1901, according to the Scripps Institute. And these deep-sea dwellers usually only come ashore when they are sick, dying or disoriented, Ocean Conservatory says.
Scripps Institution of Oceanography
“It may have to do with changes in ocean conditions and increased numbers of oarfish off our coast,” Frable said, according to the institute’s social media post. “Many researchers have suggested this as to why deep-water fish strand on beaches. Sometimes it may be linked to broader shifts such as the El Niño and La Niña cycle but this is not always the case. There was a weak El Niño earlier this year. This wash-up coincided with the recent red tide and Santa Ana winds last week but many variables could lead to these strandings.”
The researchers at Scripps took samples and froze the specimen to further study the oarfish and its biology, anatomy, geonomics and history, according to Frable.
In a comment on the post, the institute cleared up a myth surrounding doomsday fish. “There have been many questions and comments about the connection between oarfish and earthquakes,” the comment states. “While oarfish have a mythical reputation as predictors of natural disasters and earthquakes, experts have debunked this as folklore. A 2019 study found no correlation between oarfish or ribbonfish strandings and earthquakes in Japan.”
The aforementioned study, published in the Bulletin of the Seismological Society of America, looked at reports of oarfish and slender ribbonfish in Japanese newspapers. Japanese folklore says the appearance of these fish means an earthquake is coming, but the researchers found there was hardly a relationship between these fish and the occurrence of earthquakes and that newspapers likely reported the fish sightings “because rare appearances might attract readers,” according to the study.
Oarfish typically live in the mesopelagic zone — the area of the ocean least explored by scientists. They float vertically through waters 3,280 feet deep, where there is little light. Their silvery, reflective bodies help them blend in if they do hit patches of light, according to the conservatory.
Washington — An “unknown and unauthorized third party” has gained access to two dozen depositions of witnesses tied to the various investigations into former Rep. Matt Gaetz of Florida, CBS News has learned.
The leaked materials are part of a civil defamation case filed by Chris Dorworth, a lobbyist who is close to Gaetz. These materials include the sworn deposition of the minor with whom Gaetz allegedly had sex.
According to a source familiar with the matter and an email viewed by CBS News, the person who gained access went by the name “Altam Beezley.”
Gaetz has denied any wrongdoing.
The New York Times first reported on the alleged leak.
This is a breaking story. It will be updated.
