As housing values rise, home-equity loans and lines of credit are staging a comeback, MSN Money reports.
In late 2008 as the housing market slowed dramatically, home-equity
borrowing came to nearly a standstill as lenders became cautious because
values were falling so quickly. By late 2011, nearly a third of U.S.
homes with mortgages owed more on their loan than their house was worth.
In markets where home prices are rising, though, lenders are starting to
issue equity loans once again. New players have jumped in too. For
example, Discover Financial Services announced in March that it would
offer fixed-rate home-equity loans of $25,000 to $100,000. The offer is
for current customers but will be extended to others eventually.
While lenders may be more willing to extend a home-equity loan, they’re
more cautious than in the past. Lending on 100 percent of owners’ equity
is now rare, and borrowers won’t likely get more than 85 percent of a
home’s value.
Source: “Home-equity loans make quiet comeback,” MSN Money (April 23, 2013)
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