Reverse Mortgages See Steep Monthly Pullback in September

Endorsements of home-equity conversion mortgages fell to a two-and-a-half year low in September, as lenders cautiously eye competing home-equity products , such as HELOCs, Reverse Market Insight found.

Total endorsement volumes dropped 43.5% to 3,235 from 5,727 in August, with numbers in all U.S. geographic regions trending downwards. Endorsements also fell on a monthly basis at each of the ten top HECM lenders. The last time numbers came in lower was in April 2020, during the early stages of the coronavirus pandemic, when the volume plummeted to 1,601.

At the same time that mortgage rates have climbed, reverse mortgage lenders find themselves facing a growing list of nonbank originators offering home-equity products . In efforts to drive business and counter diminished incentives for refi nance mortgages, several lenders, including loanDepot, Rithm Capital and Guaranteed Rate, signaled their intentions to roll out home-equity lines of credit this year, while alternative financing companies, Hometap and Point raised millions in investor capital as they grew their national footprint. Rocket Mortgage, the country’s top originator by volume, also introduced a home-equity loan this summer.

This article originally appeared on National Mortgage News. See the article here. 

This is Hometap

large group of hometap employees

Here at Hometap, we’re collaborative, passionate, and always ready to roll up our sleeves to create solutions that help people get more out of homeownership — and out of life.

We work hard, and have some fun along the way, too. You don’t have to take our word for it: The Boston Globe and Comparably have recognized us as a great place to work, and we’ve been honored for our commitment to innovation in the fintech space by BostInno, HousingWire, and more!

Our CEO said it best: “At Hometap, we take pride in our homeowner centric mission and in being both great owners of our work and neighbors to our colleagues and our community. We have ambitious goals of creating a new industry, a lasting, durable company, and a place where those that share our values build their professional careers.”

How These Companies Retain Their Employees So Effectively

In the swiftly tilting world of modern employment, the secret to successful retention is more valuable than ever. Here’s how a few companies have managed to do particularly well in terms of keeping their employees happily on-board.

What do you think was the root cause of The Great Resignation?

The decision to leave a career or a company is a deeply personal one, so it’s difficult to point to a single root cause. Employees across industries have shared how the pandemic has impacted their views of work-life balance, commuting, and finding fulfilling work. The economic impact of the pandemic and other events on demand, pay, staffing and other factors has also clearly weighed on employees to varying degrees.

How did you manage to retain employees during such a historic moment of people leaving their jobs for hopefully greener pastures?

We can attribute our retention to a few different factors. For starters, we’re extremely fortunate to be in an industry that wasn’t impacted in the way that others — like travel, food, and healthcare — were during the pandemic, so we didn’t experience the financial strain that so many companies faced. That has allowed us to remain focused on the things that make our employees happy and fulfilled: benefits, competitive salaries, opportunities for growth, and thoughtful policies around remote and hybrid work environments, to name a few.

This article originally appeared on Comparably. Read the article here.

How Companies are Maintaining Culture in 2022

The Hometap team is still working remotely, but we’re finding a lot of opportunities to connect with our teammates face-to-face and virtually.

Over the last few weeks, we participated in a community service event where team members could contribute in-person or donate to the cause virtually, celebrated an office opening for those going hybrid, and hosted a virtual paint-and-sip. Diversifying the types of opportunities for our team to connect has been key to keeping our culture alive and well.

This article originally appeared on venturefizz. Read the article here.

Meet Andrew Blom

Meet Andrew Blom

Our Investment Managers are experts in helping you tap into your home equity, but you may have more in common with them than you think. Learn a little more about your Investment Manager, their life outside of Hometap, and why they love working with homeowners like you.

What’s the best part of your job? How does being an Investment Manager at Hometap differ from your past work experiences?
The best part of my job is when we’re able to approve a homeowner for an Investment and I walk away knowing that the homeowner trusted Hometap. It feels great to make a difference without forcing a homeowner to make sacrifices like taking on new debt.

Is there a particular homeowner story that really made an impact on you? What is it and why?
We were able to fund a homeowner who wanted to invest in his small business, which was a winery. As a semi-professional drinker, I was thrilled to take part in making his dreams come true.

What are your favorite things to do when you’re not working?
My wife and I enjoy spending money. We are proficient in spending money on food, antiques, clothes, knickknacks….you name it, we will find a way to spend money on it.

Describe your dream home.
An 1810 colonial that is NOT falling apart. To be clear, I live in an 1810 colonial already, my dream home would be one that is NOT a complete disaster.

What’s one thing you wish people knew about Hometap?
We are challenging the status quo of debt-based financing!

5 Ways to Fund Your Vacation Home Down Payment

house with solar panels and pool

Long gone are the days when having a second home was an impossible dream. In recent months, especially in the wake of COVID-19, purchasing another property is more appealing — and more popular — than ever. In fact, a recent Redfin report found that demand for vacation homes surged 87% from pre-pandemic levels to January of 2022, and according to a Bloomberg survey, more than 33% of respondents said that they were more likely to buy a second home as a result of the pandemic. Beyond having a reliable vacation home to escape to every year, buying a second property has additional benefits — and there are a number of ways you can use the equity in your primary home to fund a down payment. 

Advantages of a Vacation Home

Investing in real estate can be a great way to diversify your portfolio; in addition to stocks, bonds, and mutual funds, owning property can help you have a more well-rounded and less volatile collection of assets. There’s also the potential for gaining long-term earnings in addition to those from your primary residence through appreciation over time.

You can enjoy tax benefits as well. If you use the second property for most of the year rather than simply renting it out, you’re able to deduct both property taxes up to $10,000 and up to $750,000 of mortgage interest on your first and second homes. In order to take advantage of these benefits, however, you’ll first want to make sure you’re eligible, since there are some stipulations if you rent out the property for even a short amount of time during the year.

Thinking ahead to retirement, if you have your heart set on a particular destination in which to spend your golden years, you may be able to secure a spot at a relatively low price and interest rate and reap the benefits of appreciation rather than waiting until you’re ready to retire to purchase a property. 

And, of course, there are the priceless emotional benefits of having a place in which you can make lasting memories with your family and friends. 

How to Fund Your Vacation Home Down Payment

1. Home Equity Loan

One of the most common options is a home equity loan, which usually has the advantage of a fixed interest rate, so your payments will be consistent every month. You’ll also receive the funding in a lump sum, which can be helpful in terms of getting a down payment together quickly. However, you’ll need to be prepared to foot the bill for the loan installments on top of your existing monthly mortgage payments, which can add up.

2. Home Equity Line of Credit (HELOC)

Another method is a home equity line of credit (HELOC). On the plus side, you have quite a bit of flexibility — both in terms of how much money you can access and how often you can access it. However, the variable interest rates attached to HELOCs can mean that monthly payments can fluctuate significantly from month to month. You’ll also want to keep an eye on your credit score, since the lender can freeze your HELOC if it drops too low.

3. Cash-out Refinance

A cash-out refinance lets you access your equity through a new mortgage on your home that has a balance larger than your current one, giving you the difference in cash to pocket and put toward your expenses. However, keep in mind that you’ll have to pay the same fees on this mortgage as the original one, including those for closing costs and potentially an appraisal.

4. Home Equity Investment

Finally, a home equity investment provides you with cash in exchange for a share of your home’s future value. There aren’t any interest or monthly payments to worry about, nor any restrictions on how you use the funds — so you can use the cash toward a down payment on a second home, or even to pay off debt in order to get your finances into better shape before buying another property. With a Hometap Investment, you have 10 years to settle  with savings, a refinance, or through the sale of your home.

5. Alternative Sources

Beyond your equity, you can also use savings, investment sources (IRAs, 401(k)s), additional income streams from a side hustle — or a combination of these — to pull together the money for a down payment.

If you’re a homeowner who is seeking funding for a second home or investment property, take our five-minute quiz to find out if a Hometap Investment might be a good fit to get the money you need.

YOU SHOULD KNOW…

We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

Alternative Ways Homeowners Can Access Their Home Equity

Inflation and higher interest rates make it more difficult for homeowners to absorb the costs associated with traditional equity financing.

Home equity investments offer a lesser-known but innovative way to tap into equity. They allow homeowners to get cash upfront in exchange for a share of their home’s future value, and the home secures the investor’s interest. Qualification requirements differ from those of traditional refinancing, and homeowners do not need to worry about monthly payments or interest charges with an equity investment—just appraisal costs, origination fees and closing costs. To settle the investment, homeowners buy the investor’s share after a set period of 10 to 30 years or whenever they decide to sell or refinance their home before that time.

Unlike financing options that include specific criteria for how the funds are used, home equity investments allow homeowners to use the funds for any reason, making it a flexible option. Some use the cash for small business opportunities, diversifying their portfolio, eliminating debt or paying for college tuition, but the possibilities don’t stop there.

This article originally appeared on WealthManagement.com. Read the article here.

Meet Erin Loftis

Meet Erin Loftis

Our Investment Managers are experts in helping you tap into your home equity, but you may have more in common with them than you think. Learn a little more about your Investment Manager, their life outside of Hometap, and why they love working with homeowners like you.

What’s the best part of your job? How does being an Investment Manager at Hometap differ from your past work experiences?

Hands down, the best part of my job is helping homeowners catapult towards goals that would have taken them a lot longer to achieve without access to their equity. My favorite phone calls are from happy homeowners that just received funding and we are jumping for joy together. I live for that excitement every day!

Is there a particular homeowner story that really made an impact on you? What is it and why?

Yes, there are some that really resonate with me — like homeowners who have used a Hometap Investment to open a successful business or to avoid bankruptcy.

What are your favorite things to do when you’re not working?

I consider myself a professional Tex-Mex connoisseur — all the tacos, please!

What’s one thing you wish people knew about Hometap?

It’s the culture for me! I absolutely love working with this group of people that truly embody the values and mission of Hometap. From getting a birthday call from Jeff to always receiving fun goodies in the mail, it feels like we’re all still connected even while working remotely!

The Pros, Cons, and Alternatives to HERO Loans

modern home with windows

The average American homeowner spends about $2,000 per year on energy. Small efficiency upgrades like sealing windows and doors can put a dent in those costs, and larger renovations like solar installations can offer greater savings. But like so many things, you’ve got to spend money upfront to save money in the long term. That’s where solutions like the HERO loan can come in handy. 

You may have heard the term before, but what is a HERO loan, exactly? Simply put, a Home Energy Renovation Opportunity (HERO) loan is a form of financing that helps eligible homeowners cover energy-efficient improvements like window and door installation, solar panels, roofing, and landscaping. It originated from the Property Assessed Clean Energy (PACE) program, which finances these kinds of upgrades for residential, commercial, and industrial properties. 

The HERO home improvement program, sometimes referred to as the HERO solar program for solar panel financing, is specifically geared toward residential buildings and lets qualified homeowners borrow up to 15% of their home’s value. It’s important to note that the HERO loan program also differs from the VA home loan program known as “Hero Loans,” which are designed to provide home financing assistance to veterans and their families. 

Advantages and Disadvantages of HERO Financing

Like any home financing option, there are pros and cons to using HERO loans. On the plus side, if a borrower is eligible for one of these loans, they receive 100% of the cost of qualified improvements (again, not to exceed 15% of the home’s value). The loans typically have terms of 5–25 years, and homeowners can get started through contacting their local government’s PACE program sponsors. Approval criteria tends not to be as restrictive as traditional financing choices, since it is based on the equity in your home rather than your credit score. The loan may also be able to be transferred if the homeowner sells their home before paying off the loan, provided that the buyer and their lender are amenable to it.

However, HERO loan payments are added onto your property taxes, and since they’re classified as a tax lien, they take precedence over any other loans on the home in case the homeowner defaults. For this reason, lenders can be averse to backing HERO loans. In addition, the payments frequently appear on the second property tax bill instead of the first, which can put many homeowners in a particularly precarious financial position if they’re left scrambling to find the money to cover the extra expenses. And while it depends on the lender, this issue can also come into play when the homeowner is trying to resell the home, as the lenders of prospective buyers often don’t want to play second fiddle to the HERO loan. 

For example, California homeowner Elizabeth B., who paid off her HERO loan with a Hometap Investment, ran into issues trying to refinance: “It is harder to refinance because of the lien they have on your home,” she said.

HERO Program Qualifications

The 2017 tax reform bill also put a $10,000 cap on property taxes, so if your bill is particularly high, you may not be able to write off your loan payments. In terms of cost, HERO loans come with a one-time fee of 6.95%, and interest rates can be quite high, up to 9%. Finally, it’s important to note that HERO loans are currently only available to homeowners in California, Florida, and Missouri, so eligibility criteria is quite narrow. 

HERO Loan Alternatives

If you are planning to make energy-efficient improvements to your home but don’t live in a participating state, there are a few other options. Many states have programs sponsored by gas and electric companies that provide free energy-saving services, such as Mass Save, Efficiency Maine, and NH Saves, to name a few. 

You can also tap into your home equity with a home equity loan, which provides a fixed interest rate and a lump sum payment. However, it can be challenging to meet the often restrictive approval requirements, and you’ll be responsible for the loan payments on top of your regular mortgage installments.

There is also a home equity line of credit (HELOC) that gives you flexibility in terms of how much and how often you can borrow money, but it too has downsides — a variable interest rate means that your monthly payments can fluctuate unexpectedly, and your lender can freeze your HELOC at any time if your credit score dips too low.

A cash-out refinance can also get you some extra funds and help you secure a lower interest rate on your mortgage. But since you’re taking out another loan on your home, you’ll have to pay the fees you dealt with the first time around when taking out your mortgage.

Another way you may be able to finance eco-friendly or energy-efficient upgrades is a home equity investment. You can receive cash in exchange for a share of your home’s future value to use for energy-efficient upgrades and replacements, all without monthly payments or interest. 

Take our five-minute quiz to see if a Hometap Investment might be a fit for you as an alternative to a HERO loan.

YOU SHOULD KNOW…

We do our best to make sure that the information in this post is as accurate as possible as of the date it is published, but things change quickly sometimes. Hometap does not endorse or monitor any linked websites. Individual situations differ, so consult your own finance, tax or legal professional to determine what makes sense for you.

Meet Charlie Lickwola

Meet Charlie Lickwola

Our Investment Managers are experts in helping you tap into your home equity, but you may have more in common with them than you think. Learn a little more about your Investment Manager, their life outside of Hometap, and why they love working with homeowners like you.

What’s the best part of your job? How does being an Investment Manager at Hometap differ from your past work experiences? 

The best part about being an Investment Manager is being able to help homeowners access their hard earned equity to accomplish goals they set out to achieve! It’s extremely rewarding on a day-to-day basis. Every day, I look forward to the new relationships I will build and the homeowners I am able to help!

Is there a particular homeowner story that really made an impact on you? What is it and why? 

A homeowner story that impacted me the most was a homeowner I completed 2 investments for.  At first, she came for an investment to fund her husband’s treatments since he became ill and hospital bills started to pile up. Unfortunately, he wasn’t getting better and needed further treatment so she called me and hoped there was room to access some more equity. This HO was relying on 1 income to pay the bills and cover the treatment and turned to Hometap twice to help fund this emergency expense. It was such a great feeling that we could be there to fund her husband’s extended treatment. She was extremely thankful for us and what we do to help homeowners!

What are your favorite things to do when you’re not working?

When I’m not working, I love to cook, travel, and be with my family!

Describe your dream home.

My dream home would be a bungalow on the beach with easy access to a dock with a boat!

What’s one thing you wish people knew about Hometap? 

The one thing I wish people knew about Hometap is how much pride IMs have in helping homeowners accomplish their goals. On the surface, we seem like another voice on the other end of the line, but that isn’t the case. We are passionate about helping people and ensuring that we give every homeowner the best possible experience when accessing their homes equity.