Why 2023 Is A Great Time to Start A Remodel Project.
It may be a great time to consider a cash-out refinance to fund your remodel project,” added Stoltz.
Towards the end of 2022, some remodeling clients went on a bit of a hiatus following the long grind of the pandemic, market changes, and a rise in interest rates. Many shifted to other interests they missed, like traveling the world and visiting the important people in their lives.
But did you know that now is actually a great time to launch that remodel project you’ve been thinking about? Contractors’ backlog for quite some time is beginning to wane, providing more availability than in the past few years, alleviating a major hurdle.
Funding the project is your next consideration. Taking money out of the securities market in a down economy is not an attractive option. It may seem like financing with a bank or credit union is undesirable due to rising mortgage and home equity rates, but a closer look tells a different story.
Mortgage rates rose in 2022, but they are still low compared to average historical rates. Fixed-rate home equity second mortgage options have recently been available in the low 6% range. This is a great option for people who already have a low-rate mortgage but want to use a portion of their equity for their remodel project.
“In mid-December, we started seeing days where 30-year fixed mortgage rates were available under 6%, down from 7% we saw this fall,” remarked Dan Stoltz, President/CEO of SPIRE Credit Union, “In late December, we saw adjustable rate mortgages (ARMs) in the low 5% range.
These are loans with a 30-year term and a fixed rate for the first five to ten years. SPIRE has a great program, which pays a significant portion of closing costs for some cash-out to refinance mortgage options.
For more information regarding fixed rates, visit:
*Graph of Historical Rates: https://fred.stlouisfed.org/series/MORTGAGE30US
