PHNjcmlwdCB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlX3ZpZXdwb3J0X2RldGVjdGlvbi5qcyI+PC9zY3JpcHQ+PHNjcmlwdCBhc3luYyB0eXBlPeKAnHRleHQvamF2YXNjcmlwdCI+bXlmaVdhdGNoV2lkZ2V0KCdteWZpV2lkZ2V0XzAnKTs8L3NjcmlwdD4=Aly J. Yale is a contributing writer for Hearst, focusing largely on housing, real estate, and mortgages. She loves demystifying these sometimes complex topics and helping consumers make informed decisions about their finances. In her 15 years as a professional writer and editor, her work has been published in Forbes, Buy Side from the Wall Street Journal, Business Insider, Money, CBS 온라인 바카라 게임, US 온라인 바카라 게임 & World Report, Fortune, and The Miami Herald. She has a bachelor바카라 게임 웹사이트�s degree in radio-TV-film and news-editorial journalism from the Bob Schieffer College of Communication at Texas Christian University and is a member of the National Association of Real Estate Editors. She lives by her reward-earning credit card and is holding onto her 2.75% mortgage rate for dear life.Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research.Mobile app users, click here for the best viewing experience.Home prices have trended downward in many cities over the past six months after hitting extraordinary highs during the pandemic. At the end of 2022, the median sale price was $479,500. But by the first quarter of 2023, it바카라 게임 웹사이트�d fallen to just under $437,000.While home prices dropping certainly mean fewer profits for those who sell a house, they also have a big impact on homeowners who are staying put. In fact, according to ATTOM Data Solutions, the recent decreases in home values have caused home equity levels to fall. As of the first quarter, just 47% of mortgaged homeowners were what ATTOM considers 바카라 게임 웹사이트�equity rich바카라 게임 웹사이트� 바카라 게임 웹사이트� down from 48.5% two quarters ago.What does falling equity mean as a homeowner? And how should it impact your financial decisions moving forward? Here바카라 게임 웹사이트�s what you need to know if you바카라 게임 웹사이트�re considering tapping into home equity in the near future.What it means to lose equityWhen your home loses value, you lose equity 바카라 게임 웹사이트� meaning you own a smaller stake in the property.Here바카라 게임 웹사이트�s an example: Say you have a mortgage balance of $100,000 on your home, and the property is currently worth $400,000. In this scenario, you바카라 게임 웹사이트�d have a 75% equity stake in your home. If you sold it for its $400,000 worth and paid off the $100,000 balance, you바카라 게임 웹사이트�d get a whopping $300,000 in profit 바카라 게임 웹사이트� or 75% of its value.Now imagine if that home바카라 게임 웹사이트�s value decreases 바카라 게임 웹사이트� from $400,000 to $300,000, for example. If this happened, your equity stake would shrink considerably 바카라 게임 웹사이트� and your possible sale profits with it. Falling equity doesn바카라 게임 웹사이트�t just reduce your profit potential, though. It also reduces your ability to borrow from your home. With products like home equity loans and home equity lines of credit (HELOCs), you can actually tap your home equity, turn it into cash, and use it for things like home improvements, college tuition, medical bills, or any other costs you might have. When your equity levels drop, there바카라 게임 웹사이트�s less to borrow from with these products.Why should you use your home equity now?If home equity levels keep trending downward, you may have less equity to borrow from down the line. For this reason, if you바카라 게임 웹사이트�ve been thinking of borrowing money 바카라 게임 웹사이트� to cover renovations, to pay for upcoming tuition bills, or for any other reason, you may want to act soon (before your equity and potential loan amount shrink further.)바카라 게임 웹사이트�Home prices have softened in many markets, and may decline more,바카라 게임 웹사이트� says Kyle Enright, president of Achieve Lending. 바카라 게임 웹사이트�That means that home equity, by extension, isn바카라 게임 웹사이트�t likely to grow significantly in the near future. For someone looking to tap home equity, this is a good time to consider doing so, considering that home values might not get much better for the foreseeable future.바카라 게임 웹사이트�Keep in mind that home equity lines of credit work like credit cards, so you could also use one as a potential financial safety net in case the country enters a recession or you fall on hard times. In this scenario, you바카라 게임 웹사이트�d take out a HELOC now 바카라 게임 웹사이트� while your equity remains high 바카라 게임 웹사이트� and then keep the line of credit open in case you need it. You바카라 게임 웹사이트�d only pay interest on what you actually use. 바카라 게임 웹사이트�바카라 게임 웹사이트�바카라 게임 웹사이트�Homeowners can use funds from a HELOC for whatever purpose they have in mind,바카라 게임 웹사이트� Enright says. 바카라 게임 웹사이트�Many people use the money to repair or renovate their homes, pay medical bills, make large expenses, or cover education costs after scholarships and other lower-cost options are exhausted.바카라 게임 웹사이트�Dangers of using your home equity nowThere are downsides to using your home equity now. For one, should your home바카라 게임 웹사이트�s value (and your equity stake) fall too much, it could make it hard to repay your home equity loan or HELOC. It could even put you upside down on your mortgage 바카라 게임 웹사이트� meaning you바카라 게임 웹사이트�d owe more on the house than it바카라 게임 웹사이트�s worth. Your lender could also freeze your HELOC if your home loses too much value, which would keep you from accessing any additional funds. In some cases, they could modify your HELOC바카라 게임 웹사이트�s terms, too.바카라 게임 웹사이트�Some HELOC agreements contain provisions that allow the lender to reduce or freeze your credit line if the value of your home significantly declines,바카라 게임 웹사이트� says Shashank Shekhar, founder of InstaMortgage. Lenders may also worry about your ability to repay your loan and take more drastic measures, Shekhar says. 바카라 게임 웹사이트�If there is a significant decline in your home value, your lender might be concerned about the increased risk of default,바카라 게임 웹사이트� Shekhar says. 바카라 게임 웹사이트�They may choose to modify the terms of your HELOC or even request immediate repayment of the outstanding balance.바카라 게임 웹사이트�The best and worst reasons to tap your home equityYou can tap your home equity for many reasons, but some are wiser than others. Debt consolidation, for example, is a good one. This is because home equity loans and HELOCs tend to have much lower interest rates than other types of debts. So using one to pay off a credit card or personal loan can often save you significantly on long-term interest.Using equity toward home improvements is smart, too. It can increase the value of your property, result in a higher sale price, and, in some cases, even qualify you for a valuable tax write-off.Conversely, home equity isn바카라 게임 웹사이트�t a smart way to fund luxury purchases or vacations, nor is it a good stopgap if you바카라 게임 웹사이트�re having financial troubles. As Shekhar puts it, 바카라 게임 웹사이트�If you have an unstable financial situation, relying on home equity to cover expenses can make it even worse.바카라 게임 웹사이트�Using your home equity is also ill-advised if you plan to sell your home soon. 바카라 게임 웹사이트�If you want to sell your home soon, don바카라 게임 웹사이트�t tap into home equity,바카라 게임 웹사이트� Shekhar says. 바카라 게임 웹사이트�The costs associated with obtaining the loan, such as closing costs or fees, might outweigh the benefits, especially if you won't have sufficient time to recoup the expenses before selling.바카라 게임 웹사이트�Bottom lineWith home equity levels falling, it바카라 게임 웹사이트�s a good time to think about your financial needs in the near term. If you think you may need to borrow from your home equity in the coming months, tapping it now 바카라 게임 웹사이트� before home values can fall further 바카라 게임 웹사이트� may be smart. Additionally, if you think you may want a financial safety net, it can also be a good time to consider using your home equity. Just make sure you understand the risks that come with using your home equity and know how you바카라 게임 웹사이트�ll repay your loan. But if you have a plan for using the money wisely and are willing to shop around for the best interest rates, this could be an ideal moment to take advantage of a high level of home equity.Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender바카라 게임 웹사이트�s website for the most current information.This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at lauren.williamson@hearst.com.