equity

5 Times a Home Equity Loan Makes Sense

If you owe less on your home than it’s worth, you have equity. With a home equity loan, you borrow against that equity and pay the loan back in equal monthly installments for a preset number of years (typically, five to 30 years). The amount you can borrow is usually capped at 80% to 85% of available equity. For example, if your home is worth $300,000 and you owe $200,000, you have $100,000 in equity. That means you may be eligible to borrow $80,000 to $85,000 in a home equity loan.

When you take out a home equity loan, your home acts as collateral, meaning a lender can repossess your house if you fail to make payments. Home equity loans can be useful, but it is crucial to consider whether you can afford one before moving forward.

Also consider how you intend to use the home equity loan. Here are five times taking out a home equity loan makes sense.

1. You can recoup the majority of what you spend

If you take out a home equity loan to pay for a home renovation, it’s essential to understand that some upgrades are strictly for your pleasure. For example, high-end light fixtures, a house full of carpeting, or a swimming pool can add a spring to your step, but are unlikely to add much value to your property when it’s time to sell. In the case of a swimming pool, it can make your property harder to sell, particularly to buyers worried about liability or who don’t want the upkeep.

When a home equity loan is used to pay for upgrades that increase your property’s value, the loan can make sense. A minor kitchen remodel costs, on average, more than $23,000, but you’ll recoup about 78% of what you spend when

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Tulsa-based Argonaut Private Equity completes sale of pipeline contractor in Northeast-Appalachian region | Business News

Tulsa-based Argonaut Private Equity has announced it has completed the sale of Otis Eastern Service, a leading contractor of pipelines for midstream and utility companies, to Artera Services, headquartered in Atlanta.

Located in Wellsville, New York, Otis Eastern was founded in 1936 and acquired by the Joyce family in 1981. During the next 33 years, the Joyce family grew Otis Eastern into a best-in-class pipeline contractor throughout the Northeast and Appalachian regions.

In 2014, Argonaut partnered with the Joyce family to facilitate succession planning and expand the management team and back office operations, which were designed to enable the company to efficiently scale to meet growing market demand. This transformation included the promotion of Casey Joyce to president and CEO, becoming the third-generation member of the Joyce family to lead the company.

“The success of Argonaut’s partnership with Otis Eastern speaks to our core focus of working alongside founder and family-owned businesses,” Argonaut CEO Steve Mitchell said in a statement. “We understand the dynamics of closely held companies and the importance of building upon the core foundation of a business. We serve as a strategic partner to management teams to unlock the next phase of growth in a company’s life cycle.”

Founded in 2002, Argonaut is a private equity firm that manages investments across multiple asset classes with $3 billion of capital deployed in direct investments in key industry sectors that include energy services, manufacturing and industrials.

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How to Pay for a Home Remodel Without Tapping Your Equity

Erin Nelsen’s house could use more walls.

The certified financial planner works outside the home from an office in Cypress, California. But her husband, Shawn, works from a makeshift home office in their kitchen. From there, he hears his kids attending online school through an opening to the adjacent dining room.

To accommodate his new working conditions, Shawn taped a “sound-insulating foam barrier” in the opening, Nelsen says.

Other homeowners have used their time sheltering in place to make more permanent changes. About one-third (34%) of homeowners who have done improvements since March 1 started sooner than planned because they had more free time at home during COVID-19 social distancing measures. That’s according to a NerdWallet survey conducted online by The Harris Poll among more than 800 homeowners who have done home improvements since March 1.

Seven percent of those renovating homeowners used a home equity loan or line of credit to pay for the update.

Equity can be a low-cost resource to finance your remodel, but it takes time to build up, which may make it difficult to start a project earlier than planned. Homeowners looking for faster options can consider the following non-equity ways to pay for a remodel.

Use your own money

The most common way people have been paying for their renovations is with their own money, according to the survey.

Roughly one-third (34%) of homeowners who have made home improvements since March 1 paid for their renovations with available funds from their checking accounts or current paychecks. One quarter (25%) used money they had specifically saved for the project.

Using your savings lets you cover renovations and repairs interest-free, says New Jersey-based certified financial planner James Kinney.

That means if you don’t already have the funds to remodel your kitchen, “my approach would be for

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Just Approved: Cheap money to access from home equity

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Mortgage adviser: Liz Bayer, ProMortgage.

Property type: Single-family home in Berkeley.

Appraised value: $1.215 million.

Loan amount: $449,000.

Loan type: 30-year fixed.

Rate: 2.625%.

APR: 2.841%.

Backstory: I have a number of clients taking advantage of historically low rates and historically high home equity to get a cash out refinance. Past clients of mine had decided that they plan to live out their days in their home but wanted to tap into their equity to make home improvements to provide features that will benefit them as they age.


What was great is that even though they had a good rate from a previous transaction, it made all the sense in the world for them to refinance rather their mortgage taking out more than $100,000 with a new rate — which was lower than the one they had, even though this was a cashout refinance.



Although they did have a lot of equity in their home, conventional lending did not allow for an appraisal waiver as guidelines do not allow for a waiver if the transaction is cash out. In spite of this, we were able to get their loan done in 23 days. This is a perfect time to tap into home equity for long term needs.


Liz Bayer, ProMortgage, 415-383-3111, [email protected]


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Home equity rates 2020 review and forecast

The year 2020 has been packed full of health and financial challenges for many Americans. Yet for home equity borrowers, there’s been some good news too. Interest rates are low, and the Federal Reserve has indicated that they’re likely to stay that way for the foreseeable future.



a living room filled with furniture and a large window: Home equity rates forecast for 2020


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Home equity rates forecast for 2020

In many situations, leveraging the equity in your home can be a smart strategy. Home equity loans can help you accomplish big-ticket goals like paying for a child’s education, making major home improvements and consolidating higher-interest debt. Better yet, when you borrow against your home equity, you may be able to reach these goals at a low interest cost and without pulling money out of savings.

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Home equity rates in 2020: Initial predictions vs. reality

At the beginning of 2020, no one could have accurately predicted all of the events that would unfold this year. In January, Federal Reserve officials decided to keep rates as they were after cutting rates three times in 2019. The Fed also indicated that further rate cuts were unlikely in the near future.

Yet despite early predictions, further rate reductions took place. On March 15, the Fed lowered benchmark rates to 0 to 0.25 percent, marking the biggest emergency rate reduction in its 100-plus year history.

When the Federal Reserve adjusts its rates, it can affect the interest rates lenders offer borrowers as well. Mortgages, HELOCs and home equity loans are just a few examples of the types of financial products that may undergo rate fluctuations based on the actions of the Federal Reserve.

Bankrate’s weekly rates survey in late March found the average rate for a $30,000 HELOC to be 5.43 percent. By September 2020, that same average rate dropped to 4.55 percent. The same

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