Home Equity Rates Dip Below 8%

/in

Home equity borrowing just delivered another bit of good news for homeowners watching rates closely. According to a midweek update from Bankrate, both home equity loans and HELOCs stayed below the 8% mark, giving borrowers a relatively affordable way to tap equity without the headache of refinancing their first mortgage into a worse rate. The median rate on a five-year home equity loan is sitting at 7.99%, while the average HELOC rate is even lower at 7.81%, keeping both options firmly in “worth considering” territory for people who need cash for major expenses.

That affordability is a noticeable shift from where things stood not long ago. HELOC rates, in particular, were hovering around 10% back in September 2024, which made borrowing against your home substantially more expensive. Now that borrowing costs have cooled, the opportunity is real—but so is the risk of moving too quickly or choosing the wrong product for the wrong reason. If you’re considering a home equity loan or HELOC while rates are under 8%, there are three smart moves that can help you take advantage of the moment without setting yourself up for surprises later.

The first is to be clear-eyed about what you’re actually signing up for with a HELOC. A HELOC is attractive right now because its variable rate tends to respond when broader interest rates trend down, and that’s helped push today’s costs lower than last year’s. But the same feature that makes a HELOC feel like a win in a cooling cycle can become a problem if rates level off or climb again. Because HELOC rates can reset monthly, you’re agreeing to live with some payment volatility, and the safe approach is to make sure your budget can handle a higher rate than today’s—even if you never end up paying it.

The second move is to understand the hidden friction of refinancing a home equity loan. Some borrowers look at today’s fixed home equity loan rates and assume they can lock one in now, then refinance cheaply later if rates drop further. The catch is that refinancing typically comes with closing costs that can run roughly 1% to 5% of the loan amount, which can erase the benefit of a modest rate drop. It also assumes the rate environment cooperates quickly enough to make refinancing worthwhile, which is far from guaranteed. A home equity loan can be a strong choice for stability, but it’s not ideal if your entire strategy depends on refinancing soon.

The third move is to shop beyond your current mortgage lender. Many homeowners default to the bank they already use because it feels simpler, but the best terms often come from lenders competing aggressively for new business. In a cooler rate climate, that competition can show up as better pricing, lower fees, or more flexible terms, and you won’t see it if you only take one quote. A smarter approach is to collect multiple offers, compare the full cost structure, and then either choose the best deal or use it to negotiate with your current lender.

Home equity borrowing is meaningfully cheaper today than it was in the recent past, and that opens doors for homeowners who need financing. But the real win isn’t just getting a rate under 8%—it’s choosing the right product, planning for rate and payment realities, and making sure fees don’t quietly eat your savings. If you take a measured approach now, you give yourself the best chance to benefit from today’s conditions without regretting the decision halfway through repayment.

Click Here For the Source of the Information.

Fewer Homebuyers Regret Their Purchase as the Market Shifts in 2025

/in

More Americans are feeling confident about their home purchases than they have in years. A new report from Realtor.com reveals that only 8% of homebuyers now believe they overpaid for their property—a sharp decline from 15% just two years ago. In addition, 37% of recent buyers reported having no regrets about their purchase at all, up from 31% in 2023. The data signals a notable shift in buyer sentiment as the housing market continues to cool and favor consumers who have the means to buy.

According to Laura Eddy, vice president of Research and Insights at Realtor.com, the days of rushed bidding wars and impulse offers are largely behind us. “As the market has shifted from a fast-paced sellers’ market to one that gives buyers more breathing room, we’re seeing buyer regret trend down,” Eddy explained. “Today’s buyers are generally more qualified, taking extra time to weigh their options and make confident decisions—factors that are helping reduce second-guessing after purchase.” The slowdown has allowed buyers to shop more carefully and negotiate on their own terms.

The study also highlighted clear generational divides. Baby Boomers expressed the least regret about their purchases, while Gen Z buyers were the most likely to feel remorse. The disparity isn’t surprising, given that older generations tend to have greater financial stability and larger down payments, whereas younger buyers often face higher borrowing costs and limited inventory in their price range.

The landscape of homebuying in 2025 looks very different from the feverish pandemic-era housing market. Back then, homes were selling in record time as low interest rates drove a buying frenzy. Now, the pace has slowed dramatically. Homes are staying on the market for a median of 63 days—up from 50 days two years ago—giving buyers more time to think before making an offer. Redfin recently labeled 2025 as the strongest buyer’s market in over a decade, noting that there are nearly 37% more sellers than buyers this year. In simple terms, buyers finally have the upper hand.

For those who can afford to purchase, this new market reality comes with benefits. Buyers are no longer forced into bidding wars or pressured to waive inspections. Negotiating for price reductions or repair requests has once again become standard practice. “When sellers outnumber buyers, buyers typically hold the negotiating power because they have a lot of options to choose from,” Redfin data journalist Lily Katz noted in the company’s latest report.

That said, the current buyer’s market has its own challenges. Mortgage rates remain far higher than the sub-3% levels seen during the pandemic years, and home prices haven’t fallen enough to fully offset the difference. Many homeowners who locked in ultra-low rates are reluctant to sell, creating a stalemate between sellers seeking high prices and buyers who need affordable monthly payments. “Sellers want top dollar because they’re focused on recouping their investment, but buyers are focused on having a low monthly payment, so there’s this gap in expectations,” Katz explained.

For prospective buyers, affordability remains a major hurdle. Some policymakers, including President Trump, have floated unconventional solutions like 50-year mortgages to make payments more manageable. Critics argue that such loans would saddle borrowers with more interest and slower equity growth, potentially creating new long-term risks for homeowners.

In short, the housing market in 2025 is a paradox. Many homeowners are staying put, anchored by low mortgage rates they may never see again. At the same time, rising costs are locking out a generation of would-be buyers. Yet, for those who can make the numbers work, the timing has rarely been better. There’s less competition, more flexibility, and—according to the data—far fewer regrets after signing on the dotted line.

Click Here For the Source of the Information.

Mortgage Rates Slide to Five-Month Low, Triggering Refinance Boom Among Homeowners

/in

Mortgage rates fell to their lowest point since March last week, reigniting interest among homeowners eager to refinance their loans and lock in better terms. The dip followed new economic data suggesting the U.S. labor market is losing momentum, prompting expectations of an upcoming Federal Reserve rate cut.

According to the Mortgage Bankers Association (MBA), the average rate for a 30-year fixed mortgage dropped by 10 basis points to 6.67% as of August 8. That decline was enough to send overall mortgage demand up 11% for the week, with refinance activity soaring 23% — the biggest jump since April. “Refinances accounted for 46.5% of all applications, and as seen in other refinance surges, the average loan size climbed significantly to $366,400,” said Joel Kan, MBA’s deputy chief economist.

While current homeowners rushed to take advantage of falling rates, new homebuyers showed only modest enthusiasm. Mortgage applications for home purchases rose just 1.4%, suggesting that affordability challenges and high home prices are still keeping many would-be buyers on the sidelines.

The appetite for adjustable-rate mortgages (ARMs) also spiked, with applications rising 25% from the previous week — the highest level since 2022. These loans, which typically start with lower introductory rates before adjusting over time, can offer short-term savings but carry longer-term risks if rates rise again.

Across most loan types, borrowing costs declined. The average rate for a 30-year FHA-backed mortgage — often used by first-time buyers — slipped to 6.4%, while 15-year fixed mortgages fell to 5.93%. The average five-year ARM rate dropped sharply by 26 basis points to 5.8%, offering borrowers another avenue for savings. Jumbo loans, however, ticked slightly higher, averaging 6.7% for homes priced above $806,500.

The drop in rates aligns with recent signs of economic softening, including weaker-than-expected job growth. These indicators have fueled speculation that the Federal Reserve may cut interest rates as early as September to stimulate the economy. “Last week’s soft jobs report increases the likelihood of a Fed rate cut,” said Chen Zhao, head of economic research at Redfin. “Markets are already pricing that in, and while rates have come down, there’s no guarantee they’ll fall further. They could fluctuate as more economic data comes out in the coming weeks.”

Even with the lower borrowing costs, home affordability remains a significant challenge. Redfin reported that the median home price stood at $397,000 in early August — roughly 2% higher than last year. At that price, a buyer with a 30-year fixed rate of 6.72% would face a monthly mortgage payment of about $2,700.

While the recent decline offers homeowners a welcome reprieve, experts caution that the window of opportunity may be brief. Economic uncertainty and shifting market expectations could cause rates to rise again before the year’s end. For now, borrowers ready to act may find this the most favorable moment in months to refinance or buy — before conditions change once more.

Click Here For the Source of the Information.

Mortgage Forbearance Is A Lifeline for Struggling Homeowners

/in

When unexpected hardship hits, homeowners can quickly find themselves unable to keep up with mortgage payments. Whether it’s a job loss, illness, natural disaster, or other financial emergency, knowing where to turn can make all the difference. One of the most effective relief tools available is mortgage forbearance—a program that temporarily pauses or reduces payments to help borrowers stay in their homes and avoid foreclosure.

Mortgage forbearance is not new, but its visibility surged during the COVID-19 pandemic when nearly 8 million homeowners took advantage of CARES Act protections. The forbearance wave that followed helped prevent a foreclosure crisis on the scale of the 2008 housing collapse. Since then, usage has declined significantly. As of March 2025, just 0.36% of mortgages—about 180,000 loans—were in forbearance, most tied to temporary hardships like unemployment, illness, or disaster-related damages.

While fewer homeowners are currently in need of forbearance, policymakers and housing advocates continue to highlight its long-term benefits. A recent study by the Urban Institute suggests broader awareness and access to forbearance programs could help prevent tens of thousands of foreclosures each year. In a shifting economy, mortgage forbearance remains a critical safety net.

To qualify, homeowners must request forbearance before missing payments. The process requires demonstrating a temporary hardship and discussing repayment options with their mortgage servicer. Common qualifying scenarios include storm damage, medical emergencies, job loss, disability, divorce, or the death of a co-borrower. However, forbearance is not guaranteed—borrowers with inconsistent payment histories or low credit scores may be denied and should explore alternatives such as loan modification or selling the property.

It is important to understand that forbearance is not forgiveness. Payments missed during forbearance must eventually be repaid, with interest. Lenders typically offer one of several repayment plans: reinstatement, which requires a lump-sum payment at the end of the forbearance period; installment plans that temporarily raise monthly payments; or deferral, which tacks the missed payments onto the end of the loan. In more serious cases, borrowers may be able to modify their loan terms or consider selling the home to avoid default.

Forbearance terms can vary significantly depending on the loan type. Government-backed mortgages—such as those backed by the VA, FHA, Fannie Mae, or Freddie Mac—often come with specialized forbearance options, especially in the wake of major natural disasters. These programs typically include suspension of late fees, foreclosure protection, and flexibility at the end of the forbearance period. During the pandemic, the CARES Act allowed qualifying borrowers to pause payments for up to 18 months with no penalties, and many had the option to defer missed payments or add them to a second loan.

Homeowners considering forbearance should ask their lender important questions before enrolling: How long will forbearance last? Will monthly payments be completely paused or only reduced? How will the lender report the forbearance to credit bureaus? What are the repayment options? Understanding the answers can help borrowers make the best decision for their situation.

Though mortgage forbearance is generally not harmful to credit if borrowers follow agreed-upon terms, it may still be reported to credit agencies. Fortunately, it is far less damaging than foreclosure, which can severely impact a borrower’s ability to qualify for future loans.

Forbearance and deferment are often confused. While forbearance typically lasts a year or less and includes a set repayment plan, deferment may extend payment delays up to three years, often requiring repayment only when the home is sold or refinanced. In some cases, deferment may be used as a repayment method after forbearance ends.

Ultimately, mortgage forbearance is not a long-term solution but a temporary bridge during a time of crisis. When used responsibly, it offers homeowners the breathing room they need to recover financially, protect their credit, and stay in their homes. For those facing hardship, the first step is a conversation with their mortgage servicer—before falling behind.

Click Here For the Source of the Information.

How to Negotiate Home Equity Loan Closing Costs and Save Big in 2025

/in

Homeowners tapping into their equity with a home equity loan are often securing one of the largest financial products of their lifetime — second only to their mortgage. With the average U.S. homeowner sitting on more than $300,000 in equity, these loans can offer access to tens or even hundreds of thousands of dollars at rates far lower than credit cards or personal loans. But while most borrowers focus on securing a competitive interest rate, closing costs can quietly take a large bite out of the savings — unless you know how to negotiate.

Home equity loan closing costs typically range from 2% to 5% of the total loan amount. For a $200,000 loan, that could mean paying between $4,000 and $10,000 upfront. Fortunately, many of these fees are negotiable — and reducing them can put more of your equity to work where it matters most. Here’s how to approach the negotiation process with confidence and strategy.

Yes, You Can Negotiate Home Equity Loan Closing Costs
Many homeowners are surprised to learn that a variety of closing costs on a home equity loan aren’t set in stone. According to Nathan Young, founder of North Star Mortgage Network, “Reducing upfront expenses makes the loan more affordable, especially for those tapping into equity for renovations, debt consolidation, or major purchases. Paying less in fees means more of your home equity is actually going toward your goals — not into unnecessary costs.”

The key is understanding which fees are flexible and which are more fixed by external providers.

The Easier Fees to Negotiate
Several lender-controlled fees are ripe for negotiation:

Origination and Application Fees: These are charged for processing your loan. Ask your lender directly to waive or reduce them. If you’re a strong borrower or a returning client, many lenders will work with you.

Appraisal Fees: While typically set by appraisers, lenders sometimes mark them up. You can request to use a recent appraisal or choose your own appraiser if allowed.

Title and Escrow Fees: These vary by provider. Ask your loan officer to gather quotes from different title companies or request a discounted re-issue rate if applicable.

According to Nicollette Chapman, senior VP at housing data firm Zonda, “Borrowers will have the most negotiating power with lender-controlled costs like origination fees, discount points, and even application charges.”

The Harder Fees to Negotiate
Some closing costs are less flexible, often set by outside parties:

  • Recording Fees: These are charged by your local government to make your loan official.
  • Credit Report Fees: Typically a flat fee from credit agencies.
  • Third-Party Appraisal Costs: If you can’t select your own appraiser, you may be stuck with whatever the lender’s preferred vendor charges.

Still, there may be creative ways to handle them. For example, Chapman notes that many fees can be rolled into your loan amount, reducing the need for large cash payments upfront — though this will slightly increase your long-term interest expense.

  • How to Negotiate Effectively
    Smart negotiation starts with preparation and comparison shopping.
  • Request Estimates from Multiple Lenders: Aim to collect offers from a federally insured bank, an independent mortgage company, and a mortgage broker. Your personal bank may offer loyalty pricing, and comparing a mix of lenders helps you get a clear picture of what’s reasonable.
  • Ask for Fee Breakdowns: Go line by line through your loan estimate. If something looks inflated or unclear, ask for clarification — or a better deal.

Use Competing Offers to Your Advantage: If another lender is offering a lower fee structure or better rate, don’t be shy about showing that offer and asking your preferred lender to match or beat it.

Mortgage expert Mark Worthington of Churchill Mortgage advises, “The best way to be successful in negotiating home equity loan closing costs is to speak to more than one source. This allows you to compare the service and cost levels to find what best serves your needs.”

For the bold negotiator, there’s even a more aggressive approach. David Wickert, president of Accunet Mortgage, recommends including all lenders on one email thread and attaching their quotes — then asking who can improve their offer before a specific deadline. “It’s unconventional, but effective,” he says.

Negotiating your home equity loan’s closing costs can lead to meaningful savings and help you maximize the value of your loan. Focus your efforts on lender-controlled fees, shop around, and be ready to present competing offers.

Above all, remember that negotiation is about collaboration, not confrontation. “Ask questions. Push back — respectfully,” says Young. “A good lender will be transparent and work with you.”

And while you’re negotiating, stay patient. Closing on a home equity loan can take anywhere from two weeks to two months, and it’s worth investing the time up front to ensure you walk away with the best deal — and a loan structure that supports your financial goals for years to come.

Click Here For the Source of the Information.