The housing market can be a huge pain, and a lot of the trouble can be tied to the economy at large. Climbing interest rates that respond to the economy are out of your control and can be financially ruinous if you’re in a bad situation. Here are a couple of things you can do to avoid that.
Lock In a Home Equity Loan
Home equity loans, like any other loan, have certain pros and cons. Home equity is your home’s fair market value minus the value of the liens against it. An equity loan is a loan that is based on that value. You are essentially borrowing against yourself and the payments you have already made. A home equity loan can be used on anything you wish. It has a low fixed rate of interest that does not change, regardless of the economy. The danger is that your property is the collateral and loan payments are demanded immediately. If you can’t make a payment your home may be at risk, so only lock it in if you’re sure that won’t be a problem.
Sell Your Home
Selling your home can be an annoying, costly, and exhausting process – but in the end, it can give you the financial power to move into a better market and start anew. Each city and state have unique housing markets, and some are much better than others. Finding a location where the interest rates are lower can be hugely beneficial, provided the interest rates in your current location allow for that. Keep an eye out for cash buyers who can make the process quick, allowing you to jump on lower interest rates you may find. Cash buyers will buy your home as-is, so you don’t have to spend money on repairs.
Rising interest rates can hurt both buyers and sellers, which can make buying property challenging. Buyers will not have the financial power to buy that they did before, and sellers will find it more difficult to sell their house. If you’re planning to buy make sure you do so before the rates render your chances unrealistic. The market can be fickle and it’s hard to tell how long it will be before rates drop again.
It can be severely frustrating when your success is not determined by anything within your control, but rather by an economy that you have little influence on. That said, you can control how you prepare and react. Put forth the effort and preparation that hard financial times deserve so you can navigate them successfully.
Are you thinking about selling your home? Click here to read about things you should think about before you sell.