Want to tap into your home equity with a HELOC? Make sure you know how to avoid these extra costs before borrowing.
Thanks to high demand from buyers and limited for-sale home inventory in most markets, home values — and, in turn, home equity levels — have increased rapidly over the past few years. For example, homeowners saw their equity grow by a collective total of $1.3 trillion from the fourth quarter of 2022 to the fourth quarter of 2023, an increase of 8.6% year over year, according to recent Corelogic data.
It's typically wise to shop around anyway to find the best rate and terms on a HELOC, so, as part of that process, make sure to inquire about and compare any annual fees that are tied to the HELOCs you're considering.Teaser ratesSome lenders offer low introductory rates on HELOCs to entice borrowers, but these rates often expire after a short period, leaving you with a higher interest rate than you may have otherwise anticipated.
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