Interest rates are high, impacting borrowing costs significantly. A homeowner considering a $160,000 renovation via a HELOC faces an 8% interest rate, potentially costing $12,000 to $15,000 in interest. The article suggests that undertaking the renovation is reasonable if it enhances quality of life and the homeowner can afford the repayments. The piece emphasizes that if the homeowner plans to stay in their home for a significant time, the interest can be viewed as a manageable cost for improved living conditions.
Even though the Fed made a few rate cuts in late 2024, borrowing is still an expensive prospect these days.
If they intend to stay in their home for another 12 to 15 years or more, then they can think about it this way.
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