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☆ More homeowners just started pulling cash out of their properties. Here's why.
▼ + stars: | 2024-11-04 | by ( Diana Olick | In Dianaolick | ) www.cnbc.com time to read: +3 min

U.S. homeowners are sitting on a record amount of equity, but higher interest rates over the past two years have made them reluctant to tap into it. While mortgage rates don't exactly follow the Fed's rate, home equity lines of credit, or HELOCs, are tied to it. "Over the past 10 quarters homeowners have extracted $476B in equity, exactly half the extraction we'd expect to see under more normal circumstances. Homeowners tend to use equity for home repairs, renovation projects and large expenses, such as college tuition. More supply is coming on the market, and primary mortgage rates are higher than they were over the summer.

Persons: Andy Walden, Walden Organizations: Los Angeles , California ., ICE Mortgage Technology, Federal Reserve, Fed Locations: Chatsworth, Los Angeles , California, Los Angeles , California . U.S

☆ How to make the Fed rate cut work for you
▼ + stars: | 2024-09-18 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +11 min

In its August survey of car shoppers, a majority (64%) said a Fed rate cut likely would affect the timing of their purchase. But here’s the thing: Car loan rates are pretty high — the average is 7.1% for new cars and 11.3% for used cars, according to Edmunds. If you do buy a home this year and are considering buying down points to reduce your mortgage rate, crunch some numbers first, Diodato advised. That’s because you will pay thousands of dollars to buy down your mortgage rate now, and then thousands more in fees to refinance. What to do if you’re not near retirement: Reconsider how much money you’re keeping in cash or cash-equivalent investments.

Persons: Jerome Powell, Powell, “, ”, Greg McBride, McBride, Chris Diodato, Jessica Caldwell, ” McBride, Caldwell, We’re, Diodato, you’ll, won’t, Kathy Jones, Jones Organizations: CNN, Federal Reserve, Bankrate.com, Fed, Treasury, FDIC, Schwab Center, Financial Research, AAA, Bond Locations: Edmunds, Schwab.com

☆ What to do now that the Fed is signaling lower interest rates
▼ + stars: | 2024-07-31 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +9 min

Given the many ways lower rates can affect your finances, here are some things to consider when deciding what steps to take in response. Here’s how lower rates may affect key areas of your financial life, along with tips on what to do about it. If that proves difficult to get, see if you can transfer your balance to a credit card from a credit union or local bank that offers lower rates than the biggest banks. And because many variables determine what that factor will be, it will be hard to figure out the impact of lower interest rates. His advice: Don’t keep more than six months’ to a year’s worth of living expenses in cash or cash equivalents.

Persons: ”, Greg McBride, ” McBride, “, Chris Diodato, Diodato, you’ll, McBride, ” Dodiato, Collin Martin, don’t Organizations: New, New York CNN, Federal Reserve, Bankrate, Schwab Center, Financial Research, AAA Locations: New York, Schwab.com

☆ What to do when the Fed starts cutting interest rates
▼ + stars: | 2024-07-27 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +8 min

New York CNN —Over the past couple of years, the Federal Reserve aggressively raised its key interest rate to a 23-year high to beat down inflation. But, realistically, how much you’ll save when the Fed lowers rates will depend on how quickly it cuts and by how much each time. Since loan amounts are substantial, this is one area where even small cuts in interest rates could make a meaningful difference in what a homebuyer will pay. A couple of quarter-point rate cuts from the Fed won’t make it meaningfully cheaper, McBride said. A few rate cuts won’t make much of a dent in today’s record-high average rate of 20.7%.

Persons: ”, Greg McBride, ” McBride, “, Chris Diodato, McBride, Diodato, you’re, ” Dodiato Organizations: New, New York CNN, Federal Reserve, Bankrate, Fed Locations: New York

Opening a U.S. Bank Checking AccountYou can open a U.S. Bank checking account online or at a branch. Chase Bank ReviewU.S. Bank Checking Accounts vs. Wells Fargo Checking AccountsThere are four Wells Fargo checking accounts, including a checkless bank account similar to the U.S. Bank Safe Debit account. Wells Fargo ReviewWhy You Should Trust Us: How We Reviewed U.S. Bank Checking AccountsWe used our checking account methodology to review the two U.S. Bank checking accounts. U.S. Bank Checking FAQsWhat makes U.S. Bank checking accounts attractive to customers? A U.S. Bank checking account may attract new customers who want a top checking account bonus.

Persons: You'll, U.S . Bank Overdraft, It's, Wells, you'll Organizations: U.S, Bank, U.S . Bank, . Bank, Bank Smart, Start Banking U.S, Branch, Overdraft Protection U.S . Bank, overdrafts, Federal Insurance U.S, FDIC, U.S . Bank Mobile, Pinnacle, U.S . Bank Smart Rewards, Apple, Google, Banking, Consular, Bank Customer Service, Chase Bank Review U.S, Business, Bank Smart Rewards, Chevron, Samsung, PayPal, Garmin Locations: Midwest, West Coast, U.S, overdrafts, Wells Fargo, Chevron

Renovation loan eligibilityTo get a loan for a house renovation, you'll need to meet certain credit requirements. Cash-out refinances or renovation loans rolled into mortgages are typically the best renovation loan programs because they come with the lowest rates. Home renovation loans FAQsAre renovation loans a good idea? Renovation loans, or home improvement loans, can be a good idea for homeowners looking to make both essential and cosmetic changes to their homes. Renovation loans make it relatively convenient to complete upgrades or repairs that can boost your home's value.

Persons: It's, Fannie Mae's, Freddie Mac's, you'll, Douglas Boneparth Organizations: Federal Housing Administration, Bone, reno, Chevron

With average credit card interest rates at 21.59% as of February 2024 per the Federal Reserve, carrying any amount of credit card debt can become costly in a hurry. Can a debt consolidation loan actually make debt worse? "Their credit score tanks, which means they can't get another debt consolidation loan or even a credit card," said Dvorkin. Debt consolidation doesn't solve spending issuesFinancial expert Andrea Woroch points out that debt consolidation may be nothing more than a Band-Aid if you don't identify and fix the poor money management habits that got you into debt in the first place. Some debt consolidation loans have additional risksFinally, remember that some types of loans you can use for debt consolidation have a unique set of risks.

Persons: Howard Dvorkin, they're, Andrea Woroch, Kendall Meade, SoFi, Meade, Anne Lester, Lester Organizations: Federal Reserve, Business, Solutions, Asset Management

During the pandemic, mortgage rates reached historic lows. HELOC rates have generally remained between 8.16% and 8.59% this year, depending on the term length of the loan. Check out our current HELOC rates page to see the latest rates. To find out the maximum amount you could borrow with a HELOC, multiply your home's current value by your HELOC lender's maximum CLTV. For example, Boyd says that some HELOC lenders can take 50 days or more to close.

Persons: HELOCs, you'll, Adam Boyd, Boyd, You'll Organizations: Bank, Citizens Locations: U.S

Basics of how home equity loans workWith a home equity loan, you use your home as collateral for a loan. Home equity loan terms vary, but you usually have anywhere from five to 30 years to repay the loan. Differences between home equity loans and HELOCsHome equity lines of credit (HELOCs) are similar to home equity loans in that they let you borrow from your home's equity. What's the difference between a home equity loan and a home equity line of credit (HELOC)? She covers mortgage rates, refinance rates, mortgage lender reviews, and homebuying for Personal Finance Insider.

Persons: you've, whittle, Molly Grace, Molly, Read, Aly J, Yale Aly J, Bob Organizations: Homeowners, Chevron, Business, Finance, Insider, Rocket Companies, Twitter, Yale, Forbes, Money Magazine, The Dallas Morning News, Bob Schieffer College of Communication Locations: Chevron, mgrace@businessinsider.com

☆ The Federal Reserve may not cut interest rates just yet, here's what that means for your money
▼ + stars: | 2024-03-18 | by ( Jessica Dickler | ) www.cnbc.com time to read: +4 min

"Interest rates took the elevator going up; they are going to take the stairs coming down," he said. Annual percentage rates will start to come down when the Fed cuts rates but even then, they will only ease off extremely high levels. "The reality of it is, a lot of borrowers are paying double-digit interest rates on those right now," McBride said. Federal student loansFederal student loan rates are also fixed, so most borrowers aren't immediately affected by the Fed's moves. But undergraduate students who take out new direct federal student loans are now paying 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.

Persons: Chris Wattie, Greg McBride, McBride, Sam Khater, Freddie Mac's, that's, Ivan Drury, Edmunds, Drury Organizations: Reuters, Treasury, Fed Locations: Edmunds

But borrowing money always comes with some risks, and home renovation loans can be particularly risky when used to purchase a fixer upper. Renovation loan eligibilityTo get a loan for a house renovation, you'll need to meet certain credit requirements. Cash-out refinances or renovation loans rolled into mortgages are typically the best renovation loan programs because they come with the lowest rates. Home renovation loans FAQsAre renovation loans a good idea? Renovation loans, or home improvement loans, can be a good idea for homeowners looking to make both essential and cosmetic changes to their homes.

Persons: —, It's, Fannie Mae's, Freddie Mac's, you'll, Douglas Boneparth Organizations: Service, Federal Housing Administration, Bone, reno, Chevron

☆ The Federal Reserve leaves rates unchanged. Here's what that means for your wallet
▼ + stars: | 2023-11-01 | by ( Jessica Dickler | ) www.cnbc.com time to read: +5 min

watch nowThe Federal Reserve left its target federal funds rate unchanged for the second consecutive time Wednesday. What the federal funds rate means for youThe federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. To a certain extent, many households have been shielded from the brunt of the Fed's rate hikes so far, House said. As the federal funds rate rose, the prime rate did as well, and credit card rates followed suit. If the 10-year yield stays near 5%, federal student loan interest rates could increase again when they reset in the spring, costing student borrowers even more in interest.

Persons: Brett House, that's, Sung Won Sohn, Sohn, bode, Greg McBride, Sam Khater, Freddie Mac's, Tiffany Hagler, Bankrate, Jacob Channel Organizations: Federal Reserve, Fed, Columbia Business School, Loyola Marymount University, SS Economics, Treasury, Geard, Bloomberg, Getty, Auto Locations: Larchmont , New York

☆ The Federal Reserve may not hike interest rates next week, but consumers are unlikely to feel any relief
▼ + stars: | 2023-10-27 | by ( Jessica Dickler | ) www.cnbc.com time to read: +3 min

After the previous rate hikes, the average credit card rate is now more than 20% — an all-time high. Even without a rate hike, APRs may continue to rise, according to according to Matt Schulz, chief credit analyst at LendingTree. As the federal funds rate rose, the prime rate did, as well, and these rates followed suit. Federal student loans are now at 5.5%Federal student loan rates are also fixed, so most borrowers aren't immediately affected by the Fed's moves. But undergraduate students who take out new direct federal student loans are now paying 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.

Persons: Chris Wattie, Matt Schulz, Sam Khater, Freddie Mac's Organizations: Reuters, Treasury, Auto

☆ What Is the Mortgage Interest Deduction?
▼ + stars: | 2023-10-15 | by ( Aly J. Yale | ) www.wsj.com time to read: +11 min

That’s thanks to the Home Mortgage Interest Deduction, which lets you write off the interest you pay on your mortgage loan throughout the year. What is the mortgage interest deduction? The mortgage interest deduction is a type of itemized tax deduction that has been around in some form since a federal income tax was introduced in 1913. Mortgage pointsMortgage points—an upfront fee you can pay at closing to lower your interest rate—are another form of mortgage interest, just prepaid. Whether you should take the mortgage interest deduction comes down to the age-old question of itemizing vs. using the standard deduction.

Persons: Aly J, you’re, won’t, ”, Paul T, Joseph, Joseph & Joseph, We’ll, “, Aaron Cirksena, “ You’re, ” Cirksena, Jan Organizations: Yale, Home, Joseph &, Joseph & Joseph Tax, MDRN, IRS, — Locations: Williamston, Mich, California, Annapolis, Md, “

However, there are some key differences between the mechanics of credit cards and Helocs. Still, Helocs have far lower rates than credit cards, even for borrowers with strong credit scores. If interest rates climbed to 7% a year later, your payment would rise to $58 a month until the end of the draw period—unless interest rates move again or you draw more from the line. (Secured credit cards are an option for people with limited credit history; they require a cash down payment.) Consolidating credit card debt is another common use, since rates on credit cards can be as much as double what they are on home-equity loans.

Persons: Tanza Loudenback, Aly J, Helocs, you’ve, Robert Heck, won’t, Knight, Freddie Mac, You’re, Scott Fligel, ”, Eric Alexander, Heck, “, ” Heck, Alexander Organizations: Yale, Federal, Federal Reserve, Northwestern Mutual, Income Locations: homeownership, Morty, Charlotte, N.C, Dallas

☆ The Federal Reserve leaves rates unchanged. Here's how it impacts your money
▼ + stars: | 2023-09-20 | by ( Jessica Dickler | ) www.cnbc.com time to read: +3 min

As the federal funds rate rose, the prime rate did as well, and credit card rates followed suit. The average rates for a 30-year, fixed-rate mortgage "remain anchored north of 7%," said Sam Khater, Freddie Mac's chief economist. Already, the average rate for a HELOC is up to 9.12%, the highest in 22 years, according to Bankrate. Student loansFederal student loan rates are also fixed, so most borrowers aren't immediately affected by the Fed's moves. But undergraduate students who take out new direct federal student loans are now paying 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.

Persons: that's, Matt Schulz, Sam Khater, Freddie Mac's, Greg McBride Organizations: Treasury, Bankrate.com, LendingTree

☆ The Federal Reserve may not hike interest rates this week. What that means for you
▼ + stars: | 2023-09-18 | by ( Jessica Dickler | ) www.cnbc.com time to read: +4 min

Artistgndphotography | E+ | Getty ImagesThe Federal Reserve is likely to skip an interest rate hike when it meets this week, experts predict. The central bank has already raised interest rates 11 times since last year — the fastest pace of tightening since the early 1980s. The average rates for a 30-year, fixed-rate mortgage "remain anchored north of 7%," said Sam Khater, Freddie Mac's chief economist. Auto loan rates top 7%Even though auto loans are fixed, payments are getting bigger because the price for all cars is rising along with the interest rates on new loans. Federal student loans are now at 5.5%Federal student loan rates are also fixed, so most borrowers aren't immediately affected by the Fed's moves.

Persons: Greg McBride, that's, Sam Khater, Freddie Mac's, McBride Organizations: Finance, Money, Homeowners, U.S, Treasury, Auto Locations: LendingTree, Federal

☆ An overnight locksmith can cost $400. Here's how much you might have to fork over for other emergencies
▼ + stars: | 2023-09-08 | by ( Ana Teresa Solá | ) www.cnbc.com time to read: +4 min

Their most common approach, instead, was to put the emergency expense on a credit card and pay it over time. If you do use your credit card, make sure you prioritize paying off the balance in full by the end of the month, she added. "Use your credit card as a 30-day bridge, but commit to paying that off," she said. HELOCs interest rates are generally lower than credit card interest rates. However, they tend to be variable interest rates, so you don't want to use it if you don't have to, McClanahan said.

Persons: Winnie Sun, Tiger Woods, Frederic J, Brown, Power, Tom Grill, Angi, Carolyn McClanahan, McClanahan Organizations: Federal Reserve, Sun, Wealth Partners, CNBC FA, AFP, Getty, Planning Partners Locations: Irvine , California, Rancho Palos Verdes , California, Texas , California, New York, Jacksonville , Florida

☆ 'House-rich' Americans are sitting on nearly $30 trillion in home equity. Here's how to tap it
▼ + stars: | 2023-09-07 | by ( Jessica Dickler | ) www.cnbc.com time to read: +1 min

Thanks to skyrocketing housing prices, homeowners are now sitting on nearly $30 trillion in home equity, according to the St. Louis Federal Reserve — just shy of the 2022 peak. How to tap your home for cashFactor in the terms, rates and risksWhen it comes to borrowing against your home, the terms can vary greatly, according to a LendingTree report that analyzed more than 580,000 home equity loan offers across the country. The average home equity loan amount offered to homeowners is $104,102, LendingTree found. Access to HELOCs has improved, although the most preferable terms still go to borrowers with higher credit scores and lower debt-to-income ratios. "Though a home equity loan can be a good way to pay for big expenses, like major renovations, or to consolidate high-interest debt, getting one isn't without drawback," added Jacob Channel, LendingTree's senior economist.

Persons: Louis Federal Reserve —, LendingTree, Nicole Bachaud, Jacob, LendingTree's Organizations: Louis Federal Reserve Locations: Homes, Iowa, Maryland

☆ Heloc vs Home Equity Loan: When Are They a Good Idea?
▼ + stars: | 2023-08-18 | by ( Aly J. Yale | ) www.wsj.com time to read: +10 min

And might a home-equity loan or Heloc work for your financial needs? How home-equity loans and Helocs workHome-equity loans and Helocs—home equity lines of credit—are tools for borrowing from your home equity, or the portion of your property you actually own. To use a home-equity loan or Heloc, you need to start with a good amount of equity. Lenders generally require that you maintain at least 20% equity in the home after taking out a home-equity loan or Heloc. “With a home-equity loan or Heloc—depending on the amount of equity you have in the home—much higher amounts are available.”Home-equity loan or Heloc?

Persons: Aly J, Jeff Levinsohn, Helocs, “ We’ve, ”, Susan Waite, don’t, Zillow, Alex Madonna, Louis, ” Levinsohn, Kyle Enright, ” Madonna Organizations: Yale, Point Breeze Credit Union, Center for Joint Housing Studies, Mortgage, Association, New, ”, Federal Reserve Bank of St, “ Locations: Hunt Valley, Md, “

☆ Homeowners are tapping into home equity to get cash
▼ + stars: | 2023-08-16 | by ( Anna Bahney | ) edition.cnn.com time to read: +5 min

That means homeowners are now collectively sitting on nearly $30 trillion in home equity, according to the St. Louis Federal Reserve. Other reasons that borrowers gave for taking out a HELOC or home equity loan included debt consolidation and emergency cash management. Hidden source of valueA homeowner’s equity in their home can be a tremendous source of wealth. A homeowner’s equity will fluctuate over time as they make payments on their mortgage and real estate market dynamics impact the current value of the home. Mortgage balances stay high because of home equity loansNationally, mortgage balances remain near record highs as some people turn to home equity loans, rather than HELOCs, according to a quarterly report from TransUnion.

Persons: ”, Marina Walsh, ” Walsh, HELOC originations, Joe Mellman, Freddie Mac, Mellman Organizations: DC CNN, Louis Federal Reserve, Equity Lines of, Mortgage, Association, TransUnion, “, refinances Locations: Washington, originations, U.S

☆ Massive home-price appreciation might be the secret to keeping consumers afloat as savings dry up
▼ + stars: | 2023-08-10 | by ( Phil Rosen | ) www.businessinsider.com time to read: +4 min

Homeowners' equity is the highest it's been in 25 years, which could provide a cushion as consumer savings dwindle. That trend could be set to continue as the massive accumulation of home equity provides a lifeline that consumers can tap into if things get tough. Bankrate data shows that home equity lines of credit, or HELOCs, are currently carrying an average rate close to 7%. Home equity revolving credit balances climbed for the fourth straight quarter leading up to March 2023, which presents another factor that could help sustain consumer spending. Now, real estate accounts for about 25% of total household assets, and despite deteriorating savings, still-rising equity presents a potential path forward for consumers to keep spending, Quinlan and Seery said.

Persons: Tim Quinlan, Shannon Seery, that's, Quinlan, Seery Organizations: Soaring, Service, Homeowners, Federal Reserve Board, Wells Locations: Wells, Wall, Silicon, Wells Fargo

Our experts answer readers' personal loan questions and write unbiased product reviews (here's how we assess personal loans). Secured personal loans are backed by collateral just like other types of secured loans, but for personal loans, they're a bit different. Compare Personal Loan RatesWhen is a line of credit better than a personal loan? Interest rates for personal lines of credit and credit cards tend to run higher, on average, than those for personal loans. Interest rates for personal lines of credit and credit cards tend to run higher, on average, than those for personal loans.

Persons: —, Dani Pascarella, Pascarella, You'll, might've, caterer Organizations: Service, Chevron

watch nowWhat the federal funds rate means for youWage growth hasn't been able to keep pace with higher prices for many Americans. Sarah Silbiger | ReutersThe federal funds rate, which is set by the central bank, is the interest rate at which banks borrow and lend to one another overnight. Here's a breakdown of how that affects consumers:Credit cardsSince most credit cards have a variable rate, there's a direct connection to the Fed's benchmark. As the federal funds rate rose, the prime rate did, as well, and credit card rates followed suit. Today's credit card rates are likely as high as they've been in decades.

Persons: Philipson, Sarah Silbiger, that's, Matt Schulz, they're, Freddie Mac, Sam Khater, Freddie Mac's Organizations: Eccles Federal Reserve, Washington , D.C, Reuters, LendingTree, Treasury, Istock, Getty, U.S . Department of Education Locations: Washington ,

☆ The Federal Reserve may pause its interest rate hiking campaign. What that means for you
▼ + stars: | 2023-06-09 | by ( Jessica Dickler | ) www.cnbc.com time to read: +3 min

damircudic | E+ | Getty ImagesCredit card rates top 20%The federal funds rate, which is set by the U.S. central bank, is the interest rate at which banks borrow and lend to one another overnight. For starters, most credit cards come with a variable rate, which has a direct connection to the Fed's benchmark rate. As the federal funds rate rose, the prime rate did, as well, and these rates followed suit. Federal student loans are set to rise to 5.5%Federal student loan rates are also fixed, so most borrowers aren't immediately affected by the Fed's moves. But as of July, undergraduate students who take out new direct federal student loans will see interest rates rise to 5.50% — up from 4.99% in the 2022-23 academic year and 3.73% in 2021-22.

Persons: that's, Bankrate, McBride Organizations: Getty, U.S, Treasury, Auto, U.S . Department of Education

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