Should you open a home loan this October?

The first Interest rate cut in more than four years was released in September and Inflation data Data released this month showed a further decline in the rate. While this is encouraging news, it is unlikely that the economic strains that have plagued millions of Americans in recent years will resolve themselves overnight – or even within a few months. Credit card debt is high and Defaults climb. And the cost of everyday expenses has fallen, but not quite to where many would like.

With this in mind, many are looking for ways to make ends meet. An effective way to do this is to open one Home Loan. Home equity loans have some unique advantages in today’s changing economy and provide the security that other, more volatile loan options simply don’t offer. However, your home serves as collateral in these loan situations, so it’s important to carefully consider this option before acting. Below we explain three reasons why you should consider taking out a home loan in October.

Find out about the interest rates you can get on a home equity loan here.

Should you open a home loan this October?

Not sure if a home equity loan makes sense for your financial situation now? Here are three features that can help make the case:

A lower interest rate than most alternatives

Before including one Home Loan Interest Rate It makes sense to compare your current alternatives. Unfortunately, the prices for many other products are currently simply too high. Credit cards are currently near a record level of 23%. Personal loan interest rates are much better, but are currently still close to 13%. And Home Equity Lines of Credit (HELOCs) are lower than these two (8.94%) but come with one variable interest rate that changes monthly. Compared to these alternatives, the average home loan interest rate of 8.39% is clearly the best (and cheapest) choice.

See what home loan interest rate you qualify for now.

A way to get large sums of money

It can be difficult to get a large personal loan as the cap is often close to 2.00 $100,000. Credit cards, on the other hand, come with their own limited credit limits, which you’ll need to increase with a lender if you need access to a large sum. But currently the average amount of home equity is high.

How high? About $327,000 to be exact. And even though most lenders only allow borrowers to withdraw 80% of that money, that still equates to using $214,000. Compare that to the highest credit limit credit card you currently have, and it becomes clear again that a home equity loan is your best choice for borrowing in October.

A fixed interest rate amid market uncertainty

The first interest rate cut in more than four years is not even a month old. There could be further cuts in November and December, all of which will have an impact on credit products and the overall interest rate climate, but none of them have yet had the chance to penetrate the entire market. Combined with geopolitical concerns abroad, a U.S. presidential election less than a month away, and more, the economy is currently uncertain.

Therefore, it makes sense to forgo variable-rate loan products like HELOCs and credit cards and instead pursue a fixed-rate option like a home equity loan. This way you can budget safely and without surprises. And if home loan interest rates drop significantly in the future, you could just do that refinance at this point.

The end result

Borrowing is a personal decision with personal consequences, especially if you use your home as a source of financing. However, this October could be a good time to take out a home loan. With a lower interest rate than most mainstream alternatives, the inherent ability to access large amounts of funds (on average), and a fixed rate product amid market uncertainty, this product now offers unique and timely benefits to borrowers. Still, it makes sense to be strategic about how you use your home equity because the money comes directly from one of your most important investments. So only take out an amount that you can easily pay back.