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Homeowners are sitting on record equity, so here’s how to cash out when mortgage rates are rising

American homeowners are house rich, sitting on a record amount of home equity.

Taking advantage of all that extra cash, however, becomes more difficult as interest rates rise.

Soaring housing demand over the past year and a half, driven in large part by the pandemic, caused home prices to spike. There simply wasn’t enough supply to meet the demand. Prices have now climbed close to 20% from a year ago.

As a result, homeowners gained a massive amount of tappable equity — the sum borrowers can generally take out of their homes while still leaving at least 20% as a cushion. By the end of the third quarter, borrowers had a record $9.4 trillion in tappable home equity collectively, or an average of $178,000 per borrower, according to Black Knight, a mortgage data and analytics firm.

That marks a 32% jump year-over-year.

Link to Article: https://www.cnbc.com/2021/12/14/how-to-take-cash-out-of-your-home-when-mortgage-rates-are-rising.html

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