Use of home equity lines of credit is on the rise, especially for debt consolidation.
Cash-strapped Americans are using their homes to pay down debt and keep up with the rising cost of living.
The resurgence in HELOCs comes at a contradictory time for many homeowners’ finances: After several years of high inflation, many are more indebted than ever. But they’re also sitting on near-record levels of home equity: $315,000 on average, according to data provider CoreLogic.All told, households had about $35 trillion of equity in their residences at the end of June, Federal Reserve data show.
Customers typically have a set period during which they can draw on their HELOC — usually 5 to 10 years — and, in some cases, only pay interest on the balance during that time. After the draw period closes, customers have a set repayment period of up to 20 years. Gerika Espinosa, a financial planner at DMBA in Salt Lake City, Utah, says she recommends using HELOCs as a tool for debt consolidation only when she’s confident a client is capable of living within their means and won’t be tempted to use more of the credit line than they need.
“None of our borrowers have lost their home,” Enright said. “Very, very few of any borrowers who have taken out HELOCs in the last five to six years have lost their home. As long as the lender is employing reasonable underwriting standards, there is not a lot of risk to the consumer.”
Credit Cards Credit Card Debt Home Equity Lines Of Credit Interest Rates Consumer Debt
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
There's an air of hostility around the House as MPs head into heated debatesOTTAWA — Some MPs are demanding more discipline from House of Commons Speaker Greg Fergus after an exchange between two party leaders last week got so heated one MP thought it may actually come to physical blows.
Read more »
“Family Comes First”: Man Refuses To Help Parents After They Give Their House To SisterParental favoritism usually does more harm than good. As this story shows, it can also cause deep resentment.
Read more »
Advocates Urge White House To Launch New Investigation Of Israel's Campaign In GazaAkbar Shahid Ahmed is the Senior Diplomatic Correspondent for HuffPost, based in Washington, D.C. He can be reached at akbar.ahmedhuffpost.com. A native Pakistani, Akbar has reported from across the Muslim-majority world, Europe, Asia and the U.S.
Read more »
Consumers continue to cash in on higher gold prices - House of Kahn Estate JewelersThe Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.
Read more »
Tensions, rhetoric abound as MPs return to House of Commons, spar over carbon priceThe Liberals sharpened their attacks on the Conservatives as the House of Commons returned from its summer break on Monday with the prospect of a snap election looming large.
Read more »
Trudeau to face fretful caucus retreat in B.C. ahead of return to the HouseResignation of national campaign director only latest in series of blows party has taken recently
Read more »