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How to unlock your equity in a changing housing market


Jan 20, 2023



This article talks about housing market trends and how to unlock your home equity in exchange for cash.  Home values have been rising dramatically over the past two years. In a recent survey, 71% of respondents agreed that there was never a better time to purchase a home than the last couple of years. National home values were up 18% year-over-year at the end of 2021. The average homeowner is sitting on approximately $178,000 in home equity. According to the Federal Reserve, the nationwide total home equity is estimated at $25.3 trillion as of the fall of 2021. 

Interest rates are now on the rise. Homeowners who purchased or refinanced homes while mortgage rates were at record lows were likely able to both lock in a great rate and ride the wave of home appreciation as the housing market took off in 2021. However, taking advantage of one's home equity in the form of cash is becoming more difficult with interest rate hikes coming to combat inflation.  

With home values at an all-time high and rising, there’s never been a better time to consider using your home equity for a home improvement or debt consolidation. While there may be scenarios that a cash-out refinance could benefit you, it’s best to look at the numbers and understand the long-term costs associated with each option. 

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Equal Housing Lender

Hitch, Inc. NMLS #2383367 #2383367

2158 NW Toussaint Drive. Bend, Oregon 97703

1. Qualified applicants may borrow up to 95% of their home’s value. This does not apply to investment properties.

2. HELOCs have a 10-year draw period. During the draw period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) the total of all accrued finance charges and other charges for the monthly billing cycle. During the draw period, the monthly minimum payments may not reduce the outstanding principal balance. During the repayment period, the borrower is required to make monthly minimum payments, which will equal the greater of (a) $100; or (b) 1/240th of the outstanding balance at the end of the draw period, plus all accrued finance charges and other fees, charges, and costs.The lender will calculate this amount by taking the outstanding Account Balance on the last day of the draw period and dividing it by 240 months and then adding any finance charge that accrues but remains unpaid during the monthly billing cycle plus any other fees, charges and costs to the fixed principal payment that is due. During the repayment period, the monthly minimum payments may not, to the extent permitted by law, fully repay the principal balance outstanding on the HELOC. At the end of the repayment period, the borrower must pay any remaining outstanding balance in one full payment.

3. The time it takes to get cash is measured from the time the Lending Partner receives all documents requested from the applicant and assumes the applicant’s stated income, property and title information provided in the loan application matches the requested documents and any supporting information. Most borrowers get their cash on average in 21 days. The time period calculation to get cash is based on the first 4 months of 2024 loan funding's, assumes the funds are wired, excludes weekends, and excludes the government-mandated disclosure waiting period. The amount of time it takes to get cash will vary depending on the applicant’s respective financial circumstances and the Lending Partner’s current volume of applications. Closing costs can vary from 3.0 - 5.0%. An appraisal may be required to be completed on the property in some instances.

4. Not all borrowers will meet the requirements necessary to qualify. Rates and terms are subject to change based on market conditions and borrower eligibility. This offer is subject to verification of borrower qualifications, property evaluations, income verification and credit approval. This is not a commitment to lend.

5. The content provided is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply.