Home equity loans: They’re back

NEW YORK – April 26, 2013 from Florida Realtors

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)