December 2020

December 23, 2020May 20, 2022

5 Smart Ways to Consolidate Growing Debt

Debt can wreak havoc on your ability to achieve your financial goals. That’s why it’s critical to pay off debt quickly so you can get your finances—and life—back on track. While it may feel impossible to get out of debt, consolidation can help you chip away at the burden. Here are five ways to do it.

1. Tap Into Your Largest Asset

As a homeowner, you can access your equity through a HELOC, home equity loan, cash-out refinance, or home equity investment and pay off your debts in full. A home equity investment, like Hometap provides, allows you to get cash to pay for what’s most important to you without the hassle of monthly payments or interest.

The option that will make the most sense for you depends on your debt and financial goals. Compare your options using our guide to find the best one for you.

Take our 5-minute fit quiz to get started.

2. Use a Balance Transfer Credit Card

Depending on the amount of debt you have, you may be able to transfer it all to one credit card. If you transfer it to a credit card with a 0% interest promotional period, you can avoid paying interest. You’d then have only one monthly payment while eliminating the high interest your other cards carried.

However, you’ll still need to qualify for these cards, which may require a good credit score. Plus, if you can’t pay off the debt by the end of the promotional period, you may end up paying more through higher interest. You’ll need to stick to a disciplined payment schedule if you want to avoid additional debt.

3. Take Out a Personal Loan

If you can secure a personal loan with a lower interest rate than the rate on your current debts, it may make sense to take out a loan.

Personal loans don’t require collateral. That means they don’t require you to back the loan with assets like your house or car in case of nonpayment. You’ll still need a good credit score, however, especially if you’re hoping for a low-interest rate.

4. Consider Debt Settlement

Debt settlement isn’t so much debt consolidation as it is payment consolidation. With debt settlement, a firm negotiates with your creditor(s) to lower the total amount of debt you owe. You then make one monthly payment to a settlement firm.

While that may sound ideal, you’ll want to look into the details. The process can take months, you’ll be racking up interest, in the meantime, and the firm will charge a fee. You may even have to pay taxes on the forgiven debt, and your credit score can be affected for seven years.

5. Borrow From Retirement

Consider this option with caution: If you have a retirement plan you may be able to take out a 401(k) loan. You’ll need to determine if your specific plan allows this and its terms. If you pay the loan back on time (usually five years), the cost to you is relatively low. The interest you pay on the loan actually goes back into your own account. You can also repay the loan without prepayment penalties and many plans may allow you to take payments out of your paycheck.

Over 50 and have $0 for retirement? Here’s your roadmap to get on track >>

But if you don’t pay your loan back on time, you’ll likely have some serious setbacks. At this point, it’s considered an early withdrawal, which means you’ll face a penalty and income tax. You’ll also want to consider your job status. If you leave your job, you’ll have to pay the loan back within 60 days.

Take our 5-minute quiz to see if a home equity investment is a good fit for your debt consolidation goals.

DISCLAIMER

The opinions expressed in this post are for informational purposes only. To determine the best financing for your personal circumstances and goals, consult with a licensed advisor.

December 21, 2020March 21, 2022

Hometap Home Equity Loans Review

Founded in 2018, Hometap is a Boston-based company that offers a home equity loan alternative to those wishing to tap into their home equity. The company invests in homes in exchange for a percent of the future value of the home. The investment term is ten years, at which time the homeowner can sell the home or settle the investment with savings or by refinancing.

It’s difficult to compare Hometap to other home equity loan providers because what it offers isn’t technically a loan. It’s an interesting new way for homeowners to access their equity without taking out a loan or making monthly payments. Instead, in exchange for ready cash, you give Hometap a minority stake investment. Hometap may not be a great fit for everyone. But particularly if your home has increased significantly in value since you purchased it, leaving you with equity, Hometap might work for you.

This article originally appeared on ConsumersAdvocate.com. Read the full review here.

December 18, 2020June 23, 2022

3 Brilliant Ways to Reduce Hidden Homeownership Costs

When you buy a house, no one tells you about the hidden costs of homeownership. Beyond the obvious home expenses like your monthly mortgage bill and property tax, you may find a decent chunk of your disposable income is spent on routine repairs and maintenance costs you never considered before.

But there are three key ways you can lower everyday homeownership costs and your out-of-pocket expenses.

1. Make Your Home More Energy Efficient

Updating your home so it’s more energy efficient may cost you a little up front in the short-term, but can save you big in the long-term. And you don’t have to replace every major appliance to save on energy costs. Though, if your appliances are decades old, they may be a drain on your bill. Here are some of the things to consider:

Replace windows: Broken, warped, or otherwise damaged windows can increase your energy bills by 10-25%. Replacing them can help you save on your bills and you can expect to recuperate much of the cost of window replacement if you decide to sell your home. If your windows are due for a replacement, you’ll want to feel for drafts and use caulking to seal any cracks around windows and doors.
Fix your roof: Similarly, updating your roof can positively impact energy efficiency and resale value.
Improve insulation: Adding attic insulation is a low-cost way to boost energy efficiency by keeping the heat in during colder months.
Collect rainwater: The MoneyMiniBlog recommends purchasing a $10 terra cotta storage container and a new spout for your gutter to collect rainwater and use it for your lawn, garden, and cleaning.
Set the thermostat: For maximum efficiency with minimal discomfort, you’ll want to keep your thermostat at 68 degrees or below in winter and 78 or above in summer. You can invest in smart home devices like Nest to help you regulate the temperature or turn off lights when no one is home.
Lower your water heater: Lower your water heater from the factory-standard 140 degrees to 120. The small switch can lower your electricity bill up to 5%.
Clean air filters: Replacing clogged A/C filters can save 5% to 15% in energy consumption. It’s recommended to replace them every 90 days.

MoneyCrashers created a DIY home energy checklist so you can pinpoint other possible ways to save, and the U.S. Department of Energy’s Energy Saver site offers additional tips for saving money, too.

Looking for more easy tips? Use clotheslines and drying racks instead of a dryer in warmer months, swap burned out lightbulbs with energy efficient ones, and consider low-flow toilets that can save more than $140 each year in water costs.

You can still claim tax credits for renewable energy upgrades, such as solar panels or geothermal heat pumps, though the amount of the credit is reduced each year through the end of 2021.

2. Shop Around for Homeowners’ Insurance

Like choosing deductions on your taxes or a healthcare plan, most people tend to set it and forget it when it comes to homeowners’ insurance. But just as you should revisit those choices each year, you should also make it a habit to shop around each year for the best home insurance quote.

As you shop, it’s also a good time to take stock of your belongings. Do you need more coverage? Do you perhaps need less coverage? Does it make more sense to have a higher deductible? Consider what makes sense for your situation.

Use online quote tools to compare your options, and see if bundling other insurance—like auto and life—brings the cost down. If you’re in an area prone to flooding or other natural disasters, check to see if upgrades like storm shutters and storm-resistant garage doors will help you lower your premium.

Improving your credit score, which in most states is used by insurers to determine premiums, can help you lower costs, too.

3. Do Your Own Home Maintenance

Rather than paying someone to clean your pool, landscape your yard, remove snow, or fix a clogged sink, you can learn to do yourself and save throughout the seasons. Beyond tons of tutorials on YouTube, retailers like Lowes and Home Depot offer in-store DIY workshops so you can learn everything from how to install a laminate floor to spring lawn prep. (Both also offer how-to videos on YouTube, too.)

Performing regular home maintenance also ensures you don’t let small, inexpensive fixes turn into large, expensive issues.

Of course, you’ll want to weigh the risks of DIY versus the rewards. While small projects can save you significant cash, larger projects, like fixing faulty wiring or removing a dead tree, may require the pros. You don’t want to risk further damage—and higher repair costs, or your safety.

No matter what upgrades you decide to tackle, you’ll want to save at least 1-2% of the purchase price of your home each year for home repairs and maintenance. HomeAdvisor found that in 2018 alone, the average homeowner spent more than $9,000 on home maintenance, home improvements, and emergency repairs, with one in three homeowners reporting an emergency project.

In some cases, spending money now can help you save more money in the long run, particularly when it comes to things like structural repairs that will only cost more the longer you wait. As a homeowner, you can access your home equity to cover the upfront costs. And you can do it without adding another payment to the mix. Unlike loans that have monthly payments and interest, a home equity investment like Hometap allows you to access a portion of your home equity in cash now in exchange for a share of the future value of your home.

Can a Hometap Investment cover your home upgrades so that you can save more in the long run? Find out with this quick quiz.

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.

December 18, 2020March 22, 2023

As Michigan Home Prices Grow, So Do Affordability Concerns

Michigan truly has something for everyone. With more than 100 state parks and recreation areas, 11,000 inland lakes, and 13,000 miles of hiking trails, it’s an ideal place for nature lovers.

The state is also home to Michigan State University and the University of Michigan, drawing students and college sports fans alike. Both GM and Ford are headquartered here, and other popular industries include military, aerospace, and mining. Plus, Michigan residents get to enjoy the beauty of all four seasons, from the summer heat and fall foliage to the winter snowfall. But homeownership here also comes with its own unique set of challenges.

Housing prices in the state rose six percent between June 2019 and June 2020, from $181,235 to $192,104. And in Metro Detroit, which has undergone a commercial and cultural renaissance in recent years, the contrast was especially stark. In March, as coronavirus lockdowns began, the city experienced a 61.8% decrease in home listings, more than any other city in the U.S. However, pent-up demand after restrictions were loosened led to a huge surge in sales: a massive 114% increase from May to June of 2020, and up nearly 15% from the same time in 2019. The median home price in Wayne County, where Detroit’s located, also saw the biggest year-over-year jump of any county, rising 11% to $160,000.

High Demand, Low Supply

Western Michigan has experienced slow but steady growth since the 2008 recession. Homes in Grand Rapids are now 90% more expensive than they were back then, and the average home price in Kent County as a whole is around $262,000. And in southwest Michigan, the market has been on fire. September of 2020 saw 518 closings, a number not seen since January of 2005. What’s more, sales were up 49% from last September, and the average price was $316,525 compared to $241,620—a 31% increase.

In the northern part of the state, a popular region for vacation homes, both purchases and sales have grown nearly 10% in the past year, at least partially as a result of the pandemic. The median home price is much higher here than elsewhere as well: $428,581 in Northwestern Michigan as of August 2020.

“I think we offer a really great environment here in terms of feeling like you’re a little more spaced out than you are in a city,” Chrissy Ingersoll, a real estate agent with RE/MAX Bayshore, explained to C&G Newspapers. Many Michigan residents are following the national trend of more space, more peace and quiet, and fewer people, according to local real estate agents.

“People are thinking, ‘Hey, if we can buy a place and work from home with our phone and computer, what the heck. It‘s a better lifestyle up here and we can worry less,’ ” agent Pat O’Brien told the Detroit Free Press.

Read, “Should You Use Your Home Equity to Buy a Second Home?“

However, as a result of this high demand, the area is experiencing issues with low inventory and lengthy delays with construction projects. Currently, the bookings in these vacation areas go as far as two years out, and many builders aren’t even accepting any more requests for new projects at the moment.

Shifting Financial Priorities

That’s not the only challenge. The COVID-19 pandemic has affected the Michigan job market significantly, with economists predicting two more years of increased unemployment. In turn, this raises concerns about the ability of out-of-work homeowners to keep up with their mortgage payments and mounting day-to-day expenses.

At the same time, for those staying put in their homes, there’s a desire to complete improvement projects.

“The money they might spend on a trip to Europe is being used for remodeling the kitchen, bathroom, or living room,” Janet Chambers, Executive Officer of Home Builders Association of Northern Michigan, told the Manistee News Advocate.

Are you a current Michigan homeowner who’s hoping to access your home’s equity to pay off debt, fund renovations, or cover educational expenses? If so, Hometap may be a good solution, as it allows you to receive up to $400,000 in interest-free cash without the hassle of a loan or monthly payments.

DISCLAIMER

December 16, 2020December 21, 2022

Diversify your portfolio

Tap into your home’s equity to grow your wealth.

When it comes to asset allocation, there are more than a few good reasons to have a diversified portfolio. Perhaps most importantly, a variety of investments that includes stocks, bonds, mutual funds, and real estate decreases your risk of major loss in any particular sector.

As a homeowner, you may have the opportunity to use your equity to reach your financial goals through investments and live a less stressful life.

Find out if a Hometap Investment might help you create a more well-rounded portfolio. Take our quiz to see if we’re a good fit.

December 11, 2020June 23, 2022

Escalating Expenses, Mortgages, Challenge Minnesota Homeowners

With its many lakes, mountains, and forests, Minnesota has long been a popular place to live for those who love the great outdoors. It’s also home to the Mall of America, Prince’s famed Paisley Park recording studios, and the Mayo Clinic.

Minneapolis and the Twin Cities have an active college student community, world-class restaurants, and a thriving arts and culture scene that make it a prime pick for homeowners looking for a city feel. Though the downtown core experienced a dip in sales along with the rest of the country in the early days of the COVID-19 pandemic, it bounced back in October, with pending sales in Minneapolis up 47% year over year. Yet, to a lesser degree, the area is seeing the same phenomena as major metropolitan areas like New York and San Francisco when it comes to antsy homeowners looking to purchase a new property in a quieter area after springtime lockdowns.

Getting Out…And Staying Put

The largely rural North-Central region of the state, which is approximately two to three hours from Minneapolis, reported a 63% increase in closings over last year. In Arrowhead, on the shore of Lake Superior, there was a 32% rise.

“Realtors in Greater Minnesota tell us that they have consumers buying second homes in rural areas, especially cabins, with funds they would have used on trips — especially foreign travel — pre-COVID,” Chris Galler, CEO of the Minnesota Association of Realtors, told the Star Tribune. “The change in leisure travel plans and the change in employee commuting patterns has led folks to seek out properties away from more populated areas.”

Demand in suburban Duluth has led to record highs when it comes to home prices. In October, the median cost was $210,000, a $5,000 increase from just a month earlier and 13% more than the same time in 2019.

At the same time, Michael Doyle, a real estate agent in Maple Grove, has observed that many homeowners are staying in their homes longer than ever before.

“It used to be people moved every seven years. We’re just not seeing that anymore,” he explained to CCX Media. The reasons are many, but in conjunction with less construction and increased lumber prices, the lack of housing stock has posed a significant challenge to those looking for new homes.

“We’re seeing hyperactivity right now,” said Galler, noting a 36% decrease in housing inventory. “We’re seeing a lot of first time home buyers who are very frustrated that they’re unable to find homes. We’re seeing sellers who would like to sell their homes but are having difficulty finding a home to move into.” As recently as October, however, the situation seems to be improving, with a surge in homebuilding permits.

The Cost of Living in Minnesota Continues to Grow

Even though the median home price in the state was up 9.3% from $259,000 to $283,075 between August 2019 and August 2020, one thing is clear: no matter where you go in Minnesota, real estate is more affordable than many other parts of the country. This doesn’t mean that it’s all smooth sailing; in 2019, monthly living expenses in Minneapolis came in at $2,105 and St. Paul at $1,934. On top of mortgage payments, these costs can quickly add up and make it difficult to make ends meet day to day, let alone save for the future.

If you currently own a home in Minnesota, you have an advantage when it comes to making the most of your property’s value and achieving your financial goals without having to sell your home or take out a loan. Find out if you might be able to tap into your equity and get cash to pay off debt or finally make those renovations you’ve been putting off with a home equity investment.

See if a Hometap Investment can help you reach your financial goals without a loan or monthly payments.

DISCLAIMER

December 4, 2020March 22, 2023

Stay or Go: A Tale of Two Housing Markets in New York

Apartment buildings in Manhattan, New York

The COVID-19 pandemic has affected just about every housing market in the country, but nowhere has the impact been felt as deeply as New York. The cost of living in the New York City area in particular, which has always been expensive and competitive, was turned on its head. Residents mostly hunkered down in their homes to wait out the crisis. The cost of living in New York state is seeing its own dramatic changes as a result of the pandemic.

Escaping New York City

As the country began to open back up in early summer, however, cooped-up city dwellers made their moves. Many fled to less urban areas, buying second homes in upstate New York, or moving out of state completely. In August, there were 38.7% more housing contracts in Brooklyn, a 34% rise in single-family home contracts on Long Island, and a 75.7% increase in single-family home sales in the Hamptons from the same time last year. “They’ve been out of the city with yards and pools since March and they’ve realized these places offer a lot more year round than they thought,” real estate agent Jacqueline Trelease told ABC News.

Meanwhile, the Manhattan market took a pretty big hit; home sales decreased a whopping 50% and condo contracts decreased by 34% year over year. The number of properties for sale also increased 22% since last October, a reflection of the growing urban exodus.

A Suburban Surge

Elsewhere in the state, the market has benefited as a result. In the Hudson Valley, the city of Kingston was already seeing a boom due to its creative culture and influx of urbanites looking to spread out as they grew their families. It now has the most rapidly-rising real estate prices in the country. As local broker Gary DiMauro explained to Fox 5 New York, “I think this was the event that got people off the fence,” referring to the coronavirus. “I think we also got people who were thinking about buying either a first or second home up here to actually pull the trigger.”

Read “3 Questions to Ask Yourself Before Investing in a Vacation Home”

It’s not just areas immediately outside the city, either. For example, Syracuse in central New York has been named as an up-and-coming housing market among mid-sized cities, and nearby Rochester’s median home price has skyrocketed almost 10% since last year to $180,000.

And in western New York, home values in Schuyler County have seen the biggest increase over the past five years.

So despite the downturn in NYC, this increase in activity has led to a net positive: home sales are up 12.2% overall in the state from September 2019 to September 2020.

The median sale price was also up 17.5% to $324,900 from $276,625.

Home Costs in New York

However, like many other areas of the country, demand remains high and inventory is low: as of July 2020, the number of homes on the market had dropped 21.3%. The downside for sellers and current homeowners is that prices have also fallen: 56.5% on the Lower East Side, 36.3% in the Financial District, and 5.3% in Manhattan as a whole. The cost of living in New York is becoming more feasible in the city and less so in the suburbs, but New Yorkers are proving they’re willing to make the change.

If you’re a New York homeowner that’s hoping to use this time to make improvements on your house, buy a second home, or pay down debt, Hometap might be able to help. The best part? You don’t need to sell your home to tap into its value. Instead, Hometap invests in a minority stake in your home, providing you cash upfront. You can choose to sell, or settle the investment through a cash-out refinance, savings, or a loan within a ten-year effective period.

DISCLAIMER