You have reached your limit of free articles this month.

Enjoy unlimited access to

Starting at just 99¢ for 8 weeks.


  • ePAPER

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.


Welcome to

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

Home equity loans come back

For the first time since the real estate bubble, your ability to borrow against the value of your home is returning.

This is significant because over the last eight years, there was almost no home equity line of credit (HELOC) activity and almost no second mortgage activity.

But now we have the highest equity on homes that we’ve had for years in the United States. This may sound crazy to you if you’re mortgaged up to your eyeballs, but the average equity in a home in the United States is 50 percent. So lenders want back into that game.

When does a HELOC make sense and when doesn’t it?

This is nothing like the crazed days of everybody treating their home like an ATM, but Equifax data shows three bubble states in particular have seen the largest increase in home equity lending. Those states include California, Florida and Nevada.

In Florida, as just one example, you have some people who are still upside down, but you also have many others who are buying homes for cash. With 100 percent equity, that makes them a perfect candidate for a loan.

We’re not back to the craziness of “125s” where you could borrow the value of your house plus another 25 percent during the real estate bubble. But if you have 50 percent equity or 75 percent equity, this is a growth business for community banks and credit unions sitting on cash they need to lend out to low-risk borrowers.

In fact, I’m expecting the terms and conditions on HELOCs and second mortgages will get better and better for you as a borrower over the next six months.

The reality is HELOCs can be a good standby for a rainy day. Let’s say you have to replace your HVAC and you take out a HELOC that you pay off in 36 months or less. That’s a good use of a HELOC.

On the other hand, using a HELOC to take short-term debt and turn it into long-term debt secured by your home is dangerous. It is tempting, but dangerous.

Remember, this is not free money. You have to pay it back and the terms of paying it back can get ugly if you stretch it too long.

Reader Comments ...

Next Up in

Tuna, star of the Amazing Acro-Cats, dies of cancer
Tuna, star of the Amazing Acro-Cats, dies of cancer

The cowbell won't sound quite the same now that Tuna, the star of the Amazing Acro-Cats cat circus, has died.Happy Cats Haven posted the news Friday on its Facebook page: "To all our fans of Tuna and The Rock Cats and the Amazing Acro-Cats, it's with many tears that we let you know that Samantha Martin's star kitty Tuna crossed the Rainbow Bridge...
7 small changes that will have a big impact
7 small changes that will have a big impact

It’s only a few weeks into 2017, but you’ve already come to an uncomfortable and familiar realization. New Year’s resolutions result in more guilt and depression than achievement. Forget about the big aspirations for a transformational do-over. They don’t work. How about making some small changes today that eventually can have...
Let’s have a cheer for the Amherst Hamsters
Let’s have a cheer for the Amherst Hamsters

Amherst, a tiny college of 1,795 really smart scholars in Massachusetts, made news last year when the board of trustees voted to drop Lord Jeffs as its athletic teams’ unofficial mascot. Lord Jeffery Amherst, historians discovered, was not necessarily a nice person. The 18th century British general reportedly once suggested giving smallpox-infested...
Stark numbers show heroin’s local grip
Stark numbers show heroin’s local grip

An average of seven Montgomery County residents a day were treated for drug overdoses by emergency departments in 2016, and one person alone made eight trips to the ER. Eleven people were treated twice in the same day for overdoses. The stark figures — amassed largely due to a devastating heroin epidemic — are found in a new Public Health...
After a cesarean, some women can have a vaginal birth

Premier HealthNet is one of the largest groups of pediatrics, family medicine, internal medicine, and urgent care practices in southwest Ohio. For more information, go online to Birthing a baby can be a long, painful process, but for many women the experience fulfills a deep emotional longing as a new mom. A vaginal birth...
More Stories