After hitting historic lows during the height of the pandemic in 2020, rates have climbed back up, especially during the past few months. Experts predict that the trend will continue. Meanwhile, learn about home loan options such as bank statement loans and interest-only HELOCs.

July 2022 mortgage rates forecast

Rates have increased steadily over the past 12 months; the benchmark 30-year rate is now close to 6 percent, up from just over 3 percent a year ago. In light of inflation and the Fed’s efforts to combat it, as well as the ongoing war in Ukraine, this trend is expected to continue.

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Mortgages and divorce

Divorce is a difficult situation no matter what, and it’s especially stressful when there’s a house to split. You might consider selling your home or refinancing to remove your ex’s name from the mortgage. You’ll want to be mindful of the tax implications of whichever option you choose.

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When to consider a bank statement loan

If you’re self-employed or a gig worker, your tax returns may not adequately reflect your income when you apply for a mortgage. While it shouldn’t be your first choice, you might need to obtain a bank statement loan, which you qualify for based on your bank statements.

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Interest-only HELOCs

If you’re looking to fund home improvements or other goals, you might consider using a home equity line of credit (HELOC) to borrow against the equity in your home. Interest-only repayment plans are available, which will make borrowing more affordable initially, but you’ll need to be able to afford the higher payments once the interest-only period expires.

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Failing to pay HOA fees

You’ll need to keep up with your homeowners association fees if you live in a community managed by a homeowners association. HOA fees cover important services like pest control and maintenance. If you have trouble paying the fees, your bill could go to collections or you could have a lien placed on your property, among other consequences.

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