(07/23/2010) This week, rates on mortgages and home equity lines continued to linger around record low levels according to Informa Research Services’ weekly Interest Rate Review. The national average rate on 30-year fixed rate mortgages stayed low at just 4.81%. Likewise, the national average rate on a home equity line of credit (HELOC) dropped to just 4.90%. With rates like these, refinancing or tapping into your home to save money may currently be the low hanging fruit of your personal finances.
If you are homeowner whose property is currently financed with a loan carrying a higher rate, refinancing to a low rate mortgage can save you money immediately by lowering your monthly payments. Of course, these savings should add up quickly over time and ultimately, over the term of your loan.
Furthermore, if you are looking to purchase a home, securing a low rate is one of the easiest ways to save money on your purchase. The easiest way to find the best local rates is to look online. Websites such as ERATE.com provide helpful comparison rate tables so rate shoppers can quickly find the best rates in their area.
Since the rates on home equity lines are so low, homeowners who have established a significant amount of equity in their home may want to use it to finance projects, such as home repairs or small renovations. This can benefit homeowners because the rate on HELOCs can be so much lower than the rate on a credit card. Remember that HELOCs do need to be paid off eventually, so be smart with how much you spend. Also, tapping into one’s home equity is ideal for some people, but not everyone. Consider your own individual situation before making any major personal finance decisions.
