New Freddie Mac product would help homeowners tap their home equity without losing their existing low-rate first mortgages.
Freddie Mac wants to offer second-lien mortgages to help homeowners locked into lower-interest-rate mortgages access their home equity. Freddie Mac's proposal would allow homeowners to access their home equity while keeping their low interest rate on their current loan. It could potentially be a cost-effective alternative to cash-out refinances at today's higher rates, according to the Urban Institute.
The Mortgage Bankers Association said that the so-called locked-in effect has left homeowners with cheaper mortgages unwilling to sell and/or prepay their first mortgages and looking for a way to access the housing wealth built up in their properties. Banks have stepped up their second-lien financing products to meet this growing demand. Familiar products like home equity lines of credit have always been available.
The average U.S. homeowner gained approximately $24,000 in equity during 2023, with Rhode Island, New Jersey and Massachusetts registering the most significant gains, all at $50,000 or more, according to CoreLogic. Record home prices are why home equity levels have risen nationwide, leaving most Americans in a good position. U.S. home prices rose 6.6% between the first quarter of 2023 and the first quarter of 2024, according to the Federal Housing Finance Agency House Price Index.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Mortgage rates fall below 7%, but affordability remains a dream for many: Freddie MacThere's good news for prospective homebuyers in regards to rates, but home prices still remain high.
Read more »
Mortgage rates tick up as Fed signals delay on interest rate cuts: Freddie MacThe average 30-year fixed-rate mortgage was 7.03% for the week ending May 30, according to Freddie Mac's latest Primary Mortgage Market Survey.
Read more »
Mortgage rates on the decline while applications rise: Freddie MacThe average 30-year fixed-rate mortgage was 6.95% for the week ending June 13, according to Freddie Mac's latest Primary Mortgage Market Survey.
Read more »
Jaguars QB Mac Jones' Former Teammate: 'Bill Belichick Did Not Do Right By Mac Jones'Damien Harris made it clear how he feels about why former New England Patriots quarterback and current Jacksonville Jaguars backup failed in his first stop.
Read more »
New Salt Lake Bees stadium in Daybreak has new renderings, and a new nameThe new Salt Lakes Bees stadium in Daybreak officially has a name.
Read more »
Colorado’s Deion Sanders has new coordinators, new league, new one-liners — and more dramaColorado football head coach Deion Sanders speaks with Sports Illustrated about his new book 'Elevate and Dominate.'
Read more »