In recent news, home equity lines of credit are once again becoming popular in Wisconsin due to increasing home prices and home owner confidence – along with consistently low interest rates.
According to Doug Gordon, chief executive of WaterStone Bank, “the biggest factor has been home prices going up rather than going down.”
Offers from places such as Landmark Credit Union, have been offering home equity lines of credit at an introductory annual percentage rate that’s 1.99% and fixed for 18 months. Subsequently, the total amount of equity lines of credit in 2014 in Wisconsin rose 1.9%, to more than $3 billion. This indicates that the adverse effects of the recession and housing market crash from the previous year may be stopping.
Chief executive at Landmark Credit Union, Jay Magulski, added some other reasons to the recent influx of home equity lines of credit, “as an example, someone may say, ‘I have a kitchen I’ve been wanting to remodel and now I’m going to do this,’ it might not even be something as extensive as remodeling a kitchen or adding on to a home. It may be you need to go out and take care of a roof that needs to be replaced.”
Overall, the value of Wisconsin homes rose more than 12% from $132,000 in 2011. Gordon confers that “when (home) prices are going up, they are a little more confident in spending. And obviously, the home equity lines are a perfect way for people to do improvements or buy cars and such because of the deductibility of the interest.”