Today's homeowners have more equity than at any time in the last decade and they are making the most of it. According to ATTOM Data Solutions' First Quarter U.S. Residential Property Loan Origination Report, more Americans are choosing a home equity line of credit (HELOC) than a cash-out refinance.
"Putting home equity to work is the name of the game in the 2018 housing market," said Daren Blomquist, senior vice president at ATTOM. "With interest rates rising and home price appreciation accelerating, current homeowners are increasingly turning to home equity lines of credit rather than refinances to tap their home's equity."
Similar to a credit card in which borrowers only pay interest on the funds used, the equity borrowed can be used for any purpose. But unlike a credit card, which can have interest rates over 17 percent, homeowners can obtain a HELOC for less than six percent in today's market.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.5 percent, 15-year rates are near 4.0 percent and the 5-year ARM is averaging 4.0 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.