Homeowners are seeing record levels of equity in their properties, and many plan to tap into some of that newfound wealth.<\/p>\n\n\n\n
Mortgage holders have an average of about $185,000 in home equity, according to research from Black Knight. That amount assumes retaining a 20% stake in the property.<\/p>\n\n\n\n
The options to draw money from a home are typically cash-out refinancing, home equity lines of credit, and reverse mortgages. Homeowners aged 62 and over have been using equity from their homes more often, driven mostly by cash-out refinances, according to Urban Institute research.<\/p>\n\n\n\n
\u201cAs interest rates rise in the coming year, you could see folks using more second lien products \u2026 to tap some of that equity when they need it,\u201d Karan Kaul, principal research associate at the Urban Institute\u2019s Housing Finance Policy Center, told CNBC. \u201cFolks already have a very low rate, and as rates rise, it\u2019s not going to be economical for most of them to refinance.\u201d<\/p>\n\n\n\n
Kaul predicts a shift from cash-out refinances to HELOCs, which are often used to remodel a home.<\/p>\n\n\n\n
But Greg McBride, chief financial analyst at Bankrate.com, says that even as more homeowners consider leveraging equity in their home, they should remember that it isn\u2019t 2005, when equity lending policies were looser. He says lenders aren\u2019t allowing homeowners to pull out \u201cevery last nickel of equity that you have. Just because you have home equity doesn\u2019t mean you can borrow from it,\u201d he told CNBC. Most lenders will require owners maintain at least 20% equity in their home.<\/p>\n\n\n\n
\u00a9National Association of REALTORS\u00ae
Reprinted with permission<\/p>\n","protected":false},"excerpt":{"rendered":"
Homeowners are seeing record levels of equity in their properties, and many plan to tap into some of that newfound wealth. Mortgage holders have an average of about $185,000 in home equity, according to research from Black Knight. That amount assumes retaining a 20% stake in the property. The options to draw money from a … <\/p>\n