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When will home equity loan interest rates fall again?
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If you were looking for a cost-effective borrowing option for most of the last two years, your options were limited. Credit card rates soared over 20% while personal loan interest rates were over 10% (and they’re currently averaging close to 13%). Home equity loans and home equity lines of credit (HELOCs), however, largely remained in the single digits. And, now that the Federal Reserve has cut its federal funds rate, rates on these borrowing products are declining further.
That said, it’s difficult to time interest rates with precision. As homebuyers saw in recent weeks, mortgage rates were low right after the Fed cut rates but have since increased by more than half a percentage point. Homeowners looking to access their home equity will want to avoid a similar scenario. But when will home equity loan interest rates fall again? While no one knows for sure, there are some factors to consider now that can better help answer this question.
See how low of a home equity loan rate you could lock in here now.
When will home equity loan interest rates fall again?
Home equity loan interest rates change daily so owners looking to secure the best rate would be well served by monitoring the market closely. It helps to look at recent rate changes as a guide for when they’ll fall again.
The average home equity loan interest rate for a 10-year loan was 8.60% on September 11 and 8.55% for a 15-year loan, according to Bankrate. One week later, after the Fed cut rates, rates on these loans were 8.56% and 8.49%. But they’ve continued to decline in October, even without a formal Fed meeting. They’re now 8.46% and 8.38%, respectively. And if additional data is released to confirm expectations for another rate cut when the Fed meets again on November 6 and 7, rates could drop in anticipation of Fed action. In other words, a formal rate cut doesn’t need to be issued for lenders to preemptively price in that assumed reduction and, thus, offer borrowers lower rates.
What data could affect rates? Unemployment figures could affect home equity loan rates. If unemployment numbers are poor, it could be a sign that more aggressive Fed rate-cutting action is required, thus leading to lower rates on these products. If the next round of inflation data shows a rise, that, too, could spur action. In addition to watching the market closely, pay close attention to the dates when this data is released (and the days that follow for market reaction).
In short: There is no definitive date in which home equity loan interest rates will fall again. This is a moving target but one in which borrowers should feel relatively comfortable as the overall rate climate appears to be on a gradual but encouraging decline.
Not sure what home equity loan rate you could lock in? Find out here.
The bottom line
Home equity loan interest rates are on the decline but predicting the exact date in which they will fall again is almost impossible. Instead, borrowers should follow the rate climate closely each day for an opportunity to lock in a low rate when listed. And they should consider the timely benefits of a HELOC. HELOC rates change independently each month based on market conditions, without the borrower needing to refinance. This is a major advantage now with rates on the decline and it’s something home equity loans can’t offer borrowers due to that loan’s fixed rate structure.
As is the case with all home equity borrowing, however, it’s critical to only withdraw an amount that you can afford to repay with ease. Since your home functions as collateral in these borrowing circumstances, you could risk your homeownership if you fail to repay all that was deducted from your equity.
CBS News
Wisconsin school shooter was in contact with California man plotting his own attack, court documents say
The shooter who killed a student and teacher at a religious school in Wisconsin brought two guns to the school and was in contact with a man in California whom authorities say was planning to attack a government building, according to authorities and court documents that became public Wednesday.
Police were still investigating why the 15-year-old student at Abundant Life Christian School in Madison shot and killed a fellow student and teacher on Monday before shooting herself, Madison Police Chief Shon Barnes told the Associated Press Wednesday. Two other students who were shot remained in critical condition on Wednesday.
A Southern California judge issued a restraining order Tuesday under California’s gun red flag law against a 20-year-old Carlsbad man. The order requires the man to turn his guns and ammunition into police within 48 hours unless an officer asks for them sooner because he poses an immediate danger to himself and others.
Carlsbad is located just north of San Diego.
According to the order, the man told FBI agents that he had been messaging Natalie Rupnow, the Wisconsin shooter, about attacking a government building with a gun and explosives. The order doesn’t say what building he had targeted or when he planned to launch his attack. It also doesn’t detail his interactions with Rupnow except to state that the man was plotting a mass shooting with her.
CBS’ San Diego affiliate KFMB-TV reported that law enforcement searched the man’s home Tuesday night after the order was signed by the judge.
Police, with the assistance of the FBI, were scouring online records and other resources and speaking with the shooter’s parents and classmates in an attempt to determine a motive for the shooting, Barnes told the AP.
Police don’t know if anyone was targeted in the attack or if the attack had been planned in advance, the chief said. Police said the shooting occurred in a classroom where a study hall was taking place involving students from several grades.
“I do not know if if she planned it that day or if she planned it a week prior,” Barnes said. “To me, bringing a gun to school to hurt people is planning. And so we don’t know what the premeditation is.”
On a Madison city website providing details about the shooting, police disclosed Wednesday that two guns were found at the school, but only one was used in the shooting. A law enforcement source previously told CBS News the weapon used appears to have been a 9 mm pistol.
Barnes told the AP that he did not know how the suspected shooter obtained the guns and he declined to say who purchased them, citing the ongoing investigation.
No decisions have been made about whether Rupnow’s parents might be charged in relation to the shooting, but they have been cooperating, Barnes told the AP.
Abundant Life is a nondenominational Christian school that offers prekindergarten classes through high school. About 420 students attend the institution.
The Dan County Medical Examiner’s Office identified the two people killed Wednesday as 42-year-old Erin West and 14-year-old Rubi Vergara.
An online obituary on a local funeral site stated Vergara was a freshman who leaves behind her parents, one brother, and a large extended family. It described her as “an avid reader” who “loved art, singing and playing keyboard in the family worship band.”
West’s exact position with the school was unclear.
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A teacher and student killed in a shooting earlier this week at a school in Madison, Wisconsin, were identified Wednesday by authorities.
The Dane County Medical Examiner’s Office said in a news release provided to CBS News that 42-year-old Erin West and 14-year-old Rubi Vergara were fatally shot Monday morning at Abundant Life Christian School.
Preliminary examinations determined the two died of “homicidal firearm related trauma.” Both were pronounced dead at the scene, the medical examiner said.
An online obituary on a local funeral site stated Vergara was a freshman who leaves behind her parents, one brother, and a large extended family. It described her as “an avid reader” who “loved art, singing and playing keyboard in the family worship band.”
West’s exact position with the school was unclear.
The medical examiner also confirmed that a preliminary autopsy found that the suspected shooter, 15-year-old Natalie Rupnow — a student at the same school — was pronounced dead at a local hospital Monday of “firearm related trauma.” Madison Chief of Police Shon F. Barnes had previously told reporters that Rupnow was pronounced dead while being transported to a hospital.
Police had also previously stated that she was believed to have died from a self-inflicted gunshot wound.
The shooting at the private Christian K-12 school was reported just before 11 a.m. Monday. In addition to the two people killed and the shooter, six others were wounded.
Police said the shooting occurred in a classroom where a study hall was taking place involving students from several grades.
A handgun was recovered after the shooting, Barnes said, but it was unclear where the gun came from or how many shots were fired. A law enforcement source said the weapon used in the shooting appears to have been a 9 mm pistol.
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