Disclaimer: This Inside South Florida segment is sponsored by Discover Bank. All opinions and views are of the advertiser and does not reflect the same of WSFL-TV.
With the housing market experiencing significant fluctuations, high interest rates are profoundly affecting American homeowners. A recent survey from Discover Home Loans reveals that 84% of homeowners who planned to buy a new home have reconsidered due to these rates. To help navigate this financial landscape, Rob Cook, VP of Discover Home Loans, joined Inside South Florida to share valuable insights and strategies.
Inflation is hitting homeowners hard, making everyday items more expensive and increasing the costs associated with variable-rate debts. This financial strain has led many to cut back on discretionary spending. According to Cook, one effective strategy to manage this pressure is a debt consolidation loan. This approach involves obtaining new financing to pay off existing debts, typically resulting in lower interest rates and reduced monthly payments, thus alleviating financial stress.
During economic uncertainty, homeowners have several financing options, with home equity loans standing out as particularly advantageous. Cook highlights three key benefits of home equity loans:
- Preservation of Primary Mortgage Rates: Homeowners can access the equity in their homes without affecting the low-interest rates on their primary mortgages.
- Lower Interest Rates: Home equity loans generally offer better rates than credit cards or other financing options because they are secured by the home.
- No Closing Costs: Providers like Discover Home Loans offer home equity loans with zero cash at closing and no origination fees.
The desire to renovate homes remains strong, with 57% of people either engaged in or planning renovations within the next year. Trends indicate that younger homeowners often focus on aesthetic and lifestyle improvements, while older generations prioritize maintenance and upkeep.
Cook advises obtaining multiple bids and setting aside additional funds for unexpected costs, as 50% of renovators find their expenses exceed initial estimates. Home equity loans can be an excellent financing option for these projects, allowing homeowners to fund renovations without impacting their primary mortgage rates.
For those looking to explore their home loan options or find more financial tips, Cook recommends visiting Discover Home Loans' website, discoverhomeloans.com. The site offers a wealth of resources, including articles, tips, and calculators to help homeowners make informed decisions about debt consolidation and other loan options.
