Home News HELOC loans surged at end of 2021 amid rising mortgage rates: TransUnion

HELOC loans surged at end of 2021 amid rising mortgage rates: TransUnion

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According to TransUnion, HELOC loans increased in the fourth quarter of 2021 as mortgage rates rose. ((((iStock).

Rising interest rates and rising costs are beginning to affect consumers across the United States, but they are still finding ways to borrow loans and withdraw cash from their homes. New report From Trans Union.

According to the report, interest rates on 30-year mortgages are well above the 5% annual rate (APR) mark, up from less than 3% this time last year. Freddie Mac Data..But the values ​​of the house Is also upTempt homeowners to take advantage of their equity, despite rising interest rates.

TransUnion said in the Quarterly Credit Industry Insights Report (CIIR) for the first quarter of 2022 that as mortgage rates rise, it is shifting from traditional mortgage refinancing to a mortgage loan facility (HELOC). .. New mortgage loans increased by 4% each year, up 80% from 2018 to a total of 1.2 million.

Comparing the types of mortgage loans, according to TransUnion, fewer homeowners are heading for cash-out refinancing, a 6% decline each year in the fourth quarter. Meanwhile, HELOC increased 31% year-on-year and mortgage loans increased 13% in the fourth quarter of 2021.

If you are interested in harnessing the value of your home, using an online marketplace like Credible can help you find the best option for cashout refinancing. Visit Credible to find personalized interest rates Without affecting your credit score.

Almost three quarters of the US Metros confirm double-digit home price increases in the first quarter of 2022: NAR data

Inflation directs consumers to another form of credit

inflation Maintained the highest price in 40 years According to the latest data from the Bureau of Labor Statistics (BLS), the consumer price index (CPI) rose 8.3% annually in April.

“Compared to a year ago, inflation has boosted everything from filling gas tanks to buying egg cartons,” said Michele Llanelli, vice president of research and consulting at Transunion. “Many consumers’ wages aren’t keeping up with inflation, so people are spending more to get less.

“But there are some notable benefits, such as low unemployment, increased access to credit by lenders, and good consumer performance,” Llanelli said. “All of this shows that consumers are in a good position as the economy continues to find its foothold in pandemic financial fluctuations.”

Total mortgages have fallen 28% each year as mortgage rates rise, but HELOC has been one in the past because homeowners can withdraw cash from their homes without changing the overall mortgage rate. It has increased significantly over the year. According to TransUnion, interest rates on HELOC borrowers can be higher than the interest rate on the entire mortgage, but still lower than the interest rate on personal loans.

Credible does not offer HELOC, but their marketplace offers mortgage refinancing options. This also allows you to take advantage of your equity at home.You can do it Visit Credible to compare multiple mortgage lenders at once Then choose the one with the best rate for you.

Inflation is the first in a month, but has remained high for nearly 40 years

Rising home prices will give homeowners more money available

According to TransUnion, rising home prices have increased the average size of new mortgages by 7% each year to $ 315,543.Rising house prices Reached double digits According to the National Association of Real Estate Agents (NAR), 70% of the real estate market in the first quarter of 2022. This allows homeowners to get a higher credit line from their home.

“The rise in the interest rate environment has affected the amount of mortgages available,” said Joe Melman, senior vice president and mortgage business leader at Transunion. “There are few incentives to refinance fees and periods, and for those considering buying a home, low inventory and high home prices are challenges.

“A slight decrease in new cash-out refinancing volume and a significant increase in the composition of HELOC and mortgage loans will help those who are already homeowners to continue to rise in home prices, taking advantage of the increase in home wealth. It shows that it provides an opportunity to gain access to cheaper ones, “capital.” “Mortgage lenders can drive growth in a restrained market by identifying and reaching consumers in the market and leveraging tools that can leverage available housing assets.”

If you are interested in withdrawing cash from the rising value of your home or potentially lowering your monthly payments, you may want to consider refinancing your cash out. ..To see if this is the right option for you, you can: Contact Credible to talk to a mortgage expert Then ask them to answer all your questions.

I have a financial question, but don’t know who to ask? Send an email to a trusted money expert at [email protected] And your question may be answered by Credible in our Money Expert column.

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