By Lauren Rosales, Content Writer

 Relative to human history, women have not been legally able to own property until rather recently. At the tail end of the 18th century, white married women in New York and Maryland had the slight benefit of being consulted by a judge before their husband was permitted to sell or transfer property that had been “hers.” In Massachusetts, married women might be allowed to conduct business sans husband, if that husband were on a prolonged absence–out to sea, for example. It wasn’t until New York’s 1848 <a href="https://www.thoughtco.com/1848-married-women-win-property-rights-3529577">Married Women’s Property Act</a> and the 1860 Act Concerning the Rights and Liabilities of Husband and Wife that (white) married women were enabled to conduct business independently and maintain sole ownership of gifts received. Other states followed suit, so that by the <a href="https://www.thoughtco.com/property-rights-of-women-3529578">dawn of the 20th century</a>, married women had the ability to control their own property. 



 Yet, until 1974, many credit cards <a href="https://www.cnn.com/2014/08/07/living/sixties-women-5-things/index.html"> required a woman’s husband to co-sign</a>. And it was perfectly acceptable not to issue a credit card to a single woman simply because she was a woman and did not have a husband to provide that signature. This limitation is representative of other frequent obstacles women faced on the quest for financial independence and equality. 
 

 Today, many obstacles remain. This blog post is concerned with gender and homeownership in particular, but because the home is, for so many, the largest asset, discussions of homeownership and finances are often tangentially related, if not downright intertwined. After all, without credit and the ability to save, how can anyone put a downpayment on a home and obtain a mortgage loan?
 

 Here’s the skinny: this year, women continue to earn <a href="https://www.payscale.com/research-and-insights/gender-pay-gap/#module-2">$.82 to every $1.00</a> that men do. This statistic is uncontrolled–which is to say, it compares the median salaries of all men to that of all women. The controlled pay gap, which measures the median salaries for men and women with identical jobs, qualifications, education, etc. is smaller, but still present: <a href="https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/gender-pay-gap-improvement-slowed-during-the-pandemic.aspx">$.99 to $1</a>. The COVID-19 pandemic has also exacerbated <a href="https://www.pewresearch.org/fact-tank/2022/01/14/some-gender-disparities-widened-in-the-u-s-workforce-during-the-pandemic/">some gender disparities</a> in the workforce, from the employed number of women without college degrees, to the amount of hours women worked. 
 

 According to a report by the Urban Institute, between 1990 and 2019, the number of “female-headed homeowner households” grew <a href="https://www.urban.org/sites/default/files/publication/104698/a-three-decade-decline-in-the-homeownership-gender-gap_1.pdf">from 15.7 million to 39.2 million</a>. Here at Unison, we have likewise noted an increase in the number of women using our services to access their home equity–the growth in the number of single women receiving Unison funding per month is roughly 230%! The basic context for this growth seems fairly straightforward–with more women entering the workforce, more women have established incomes with which they can purchase homes. Moreover, as the pay gap has decreased (though it nevertheless remains), women’s homeownership has increased. Plus,in the past few decades, the traditional family structure has undergone reconstructive surgery as gender norms continue to be challenged. Before the pandemic, for example, the number of stay-at-home-dads was <a href="https://www.cnbc.com/2021/05/07/stay-at-home-dads-were-on-the-rise-pre-pandemic-will-covid-accelerate-the-trend.html">on the rise</a>, and <a href="https://www.americanprogress.org/article/economics-caregiving-working-mothers/">64% of mothers</a> were the primary breadwinner in their household despite living with a partner (the number was <a href="https://everychildthrives.com/working-moms-are-critical-to-a-thriving-economy/">even higher</a> for Black and Latinx women). 
 

 
Bottom line: the number of homeowners who identify as women has greatly increased in the last few decades. Single women, in fact, comprised <a href="https://www.nar.realtor/sites/default/files/documents/2020-generational-trends-report-03-05-2020.pdf">22% of homebuyers in 2020</a>–single men, alternatively, made up only 9%. One factor for this particular statistic is that <a href="https://www.pewresearch.org/fact-tank/2019/06/20/u-s-women-near-milestone-in-the-college-educated-labor-force/">women are earning more college degrees</a> than men; another could be that women tend to take <a href="https://www.city.ac.uk/news-and-events/news/2019/10/women-dislike-financial-risk-taking-research-finds#:~:text=New%20research%20from%20Cass%20Business,attitudes%20to%20risk%20and%20loss.&text=Researchers%20from%20Cass%20Business%20School,comes%20to%20financial%20risk%20taking.">fewer financial risks</a>. 



 However, despite their increased homebuying and homeownership rates, a Yale study shows that single women are paying approximately <a href="https://insights.som.yale.edu/insights/single-women-get-lower-returns-from-housing-investments">2% more for homes</a>, and selling them for about 2% less. These numbers may seem small, but over a period of time they result in an overwhelming <a href="https://paulgp.github.io/papers/Gender_Gap_in_Housing_Returns.pdf">gap in wealth accumulation</a>. In addition, women pay <a href="https://www.housingwire.com/articles/women-pay-higher-mortgage-rates-in-49-states/">higher mortgage rates</a> in 49 states (Alaska is the exception) despite the fact that single women are <a href="https://www.urban.org/sites/default/files/publication/84206/2000930-Women-Are-Better-Than-Men-At-Paying-Their-Mortgages.pdf">statistically less likely</a> to default on a mortgage payment. Over the course of a loan, women are routinely losing <a href="https://www.businessinsider.com/personal-finance/states-women-pay-more-for-mortgages-2021-3">up to $7,000</a>. 


 
What could be the reason for this disparity? In the past, a stereotype persisted that women are generally <a href="https://www.nber.org/papers/w18511.pdf">averse to negotiation</a>. This logic has long been employed to explain that women are paid less than men because they do not ask for raises. However, <a href="https://hbr.org/2018/06/research-women-ask-for-raises-as-often-as-men-but-are-less-likely-to-get-them">more recent studies</a> of women in the workplace reveal that women don’t shy away from negotiating their salaries–<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/irel.12214">it just doesn't work</a> for them. (In fact, women often <a href="https://www.newyorker.com/science/maria-konnikova/lean-out-the-dangers-for-women-who-negotiate">suffer blowback</a> for raising the subject because their assertiveness is <a href="https://www.forbes.com/sites/kimelsesser/2021/01/21/why-women-fall-short-in-negotiations-its-not-lack-of-skill/?sh=68475b05d021">seen as off-putting</a>).


 
When it comes to home prices, the abovementioned Yale study demonstrates that men tend to time the market more effectively when shopping for a home. But this is not surprising when there are <a href="https://www.statista.com/statistics/252847/number-of-children-living-with-a-single-mother-or-single-father/">368% more single-mother households</a> than single dads, as single parents are much less likely to have the luxury of waiting for ‘the right time’ to buy a house. Men are also reportedly <a href="https://www.forbes.com/sites/alyyale/2020/01/22/single-women-own-more-homes-than-single-men--but-they-pay-more-too/?sh=109b51eb28ca">more likely to invest</a> in routine housing maintenance as well as upgrades, fetching a better sale price. Due to the continuing pay gap, it makes sense that men have <a href="https://www.aauw.org/resources/research/simple-truth/">more income to dispense</a> on such projects. 

 One study suggests that women are <a href="https://link.springer.com/article/10.1007/s11146-009-9214-y">less inclined to shop around</a> for lower mortgage rates, instead choosing a lender based solely on recommendations. Moreover, women often have <a href="https://www.gobankingrates.com/investing/real-estate/why-women-paying-more-for-homes/#:~:text=According%20to%20our%20study%2C%20women,lower%20credit%20scores%20on%20average.">lower credit scores</a>–another side effect of that persistent pay gap, which results in women borrowing more in general. The mortgage market frequently uses <a href="https://www.investopedia.com/terms/b/blackbox.asp">"black box"</a> models, of which Inside Mortgage Finance CEO Guy Cecala <a href="https://www.housingwire.com/articles/women-pay-higher-mortgage-rates-in-49-states/">opines</a>, “any sort of black box basically discriminates against single borrowers, lower-income borrowers and borrowers with lower credit scores.” This kind of one-size-fits-all algorithm actually does not fit many minority borrowers, women included. 


 
One of the best tips for women who are looking to buy a home is to <a href="https://www.lendingtree.com/home/mortgage/help-for-single-women-home-buyers/">consider many options</a> for mortgage rates from different lenders, in order to find the fairest ones. But it’s also always excellent advice to work on <a href="https://www.unison.com/blog/credit_score">increasing one’s credit score</a>. If you know you will likely sell your house in the future, be sure to <a href="https://www.unison.com/blog/home_maintenance">practice routine home maintenance</a> to ensure a fair selling price. 

 
Of course, there are many aspects of “home” beyond pure buying, selling, and ownership. A deeper analysis would interrogate domestic labor, for example, and the troubling fact that married women perform <a href="https://academic.oup.com/sf/article/91/1/55/2235879?login=false">twice as much</a> of it as their husbands–in fact, heterosexual wives who are the primary breadwinner tend to take on <a href="https://www.theatlantic.com/family/archive/2019/05/breadwinning-wives-gender-inequality/589237/">even more</a> housework. In addition, it’s difficult to consider the persistence of the gender pay gap without acknowledging the extensive and problematic history of women’s relationship to the home. Residual gender norms unarguably continue to inform the ways that we think–<a href="https://www.theatlantic.com/family/archive/2019/05/breadwinning-wives-gender-inequality/589237/">and legislate</a>–about the domestic sphere. However, this blog post may serve as a place for all of these statistics and their attendant issues to be collected together, as a basis for future deeper discussions. 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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More women own homes now than ever, but that’s not the whole story. This blog outlines inequalities for women relative to homeownership, including the persistent pay gap.

Women & Homeownership | Unison® Home Equity Sharing

by Lauren Rosales-Shepard, Content Writer 

 August is unofficially “Back-to-School” Month here in the U.S., and parents with children of all ages are sending them off to pursue their education. If your own child is making the transition to college this year, you yourself may be anticipating a transition of your own: the “empty nest.”

 It’s a pretty obvious metaphor–like birds leaving the roost to hold their own out in the wild, your child is (or children are) striking out solo into the world. Though they may return home for winter and summer holidays, the structure of your days, and your domestic environment, are about to experience enormous changes.

 Let’s face it: change is not easy. But this particular change is beset by layers of potential difficulty. 

 It is <a href="https://www.irishtimes.com/health/your-family/2023/07/28/empty-nest-syndrome-i-am-absolutely-dreading-the-day-my-last-child-will-head-off-to-college/">100% normal</a> to experience anxiety preceding, and grief following, the departure of the last (or only) child from home. Read that again. Normal. It doesn’t make you a dreaded helicopter parent; it doesn’t mean you are “too attached” to your children; it doesn’t mean you’re overly sensitive. 

 Being a parent is inevitably a considerable <a href="https://www.theguardian.com/lifeandstyle/2022/sep/15/it-struck-me-like-a-thunderbolt-how-to-survive-empty-nest-syndrome-and-come-out-smiling">part of one’s identity</a>. After all, it’s a role you’ve actively occupied for 18 years! And while a parent whose children have left for college or otherwise ‘flown the coop,’ so to speak, is still a parent, their day-to-day life is not going to reflect that in the same way. With the extra time on one’s hands, too, it can be easy to slip into an existential crisis. If you find yourself struggling to adjust to your new normal, the following tips might be helpful. 

 <ol>
<li>Reframe the narrative. If you are seeing your children’s departure as a loss, flip the angle. Think instead about how this phase of your life can be a new beginning. Consider the potential for such a moment: you can reinvent yourself, your routine, your social life, your <a href="https://extension.usu.edu/relationships/faq/marriage-vibrant-during-empty-nesting">marriage</a>. Now that you have more time to pursue your own desires, you get to decide just what those desires are. 
<li>Set new goals. If many of your past goals revolved around your child, it’s time to shift perspectives and make yourself the star of your own story, moving forward. What do you want out of life? What will make you happy? Set new goals for yourself that make the answers to these questions their starting and end points. 
<li>Get physical. Maybe you’re trying to fill your time; maybe you’re trying to obtain those <a href="https://www.medicalnewstoday.com/articles/320839">mood-boosting endorphins</a>. Take up a form of physical activity and you’ll accomplish both objectives! It’s common knowledge that exercise is good for you, so this one should be a no-brainer. Check out a Zumba class or drop into a yoga studio, or get back into jogging. Why not join a gym? Some gyms have classes that are free to their members, so you can explore the different types of movement and see what you enjoy the most. 
<li>Build a community. Have you lost touch with any friends? This could be an excellent time to reconnect. The parents of your child’s friends are likely in the same boat as you–perhaps there are a few to whom you’d like to reach out? Consider joining a club or community group of some kind, where you can meet new people with a similar interest as yourself. You might find local clubs via your public library, bulletin boards at coffee shops, or on Facebook. 

<li>Be flexible in redefining your relationship to your child. Accept the <a href="https://psychcentral.com/relationships/boundaries-with-your-adult-children">boundaries</a> that your child sets, and be patient. Do they prefer to communicate via texting, phone calls, emails, video chats? Respect their wishes. It will take some time to find the balance between actively supporting your child and allowing them the space to learn, and ultimately thrive, on their own. Remember that your role as their parent is shifting, but they are still your child. If you’re experiencing friction with your spouse, <a href="https://www.washingtonpost.com/news/parenting/wp/2017/03/23/your-child-is-not-your-confidant/">your child is not the confidante</a> you need. Moreover, don’t overwhelm your child with your grief at their departure–you don’t want to make their first independent foray into adulthood about yourself. 
<li>Perhaps it’s time for a second honeymoon. Has your marital relationship taken something of a backseat to the raising of your children? This is not uncommon! Sometimes, when the children have departed, issues in your marriage that have been swept under the rug, so to speak, <a href="https://www.washingtonpost.com/news/parenting/wp/2017/04/13/the-empty-nest-marriage-deciding-whether-to-stay-or-go/">may rise to the surface</a>. For some, these issues <a href="https://walzermelcher.com/news/empty-nest-divorces-explained-by-top-family-law-attorneys/">may be insurmountable</a>. However, for others, the so-called “empty nest years” can be a time of <a href="https://marriagedynamics.com/marriage-reconnect-empty-nest-years/">exciting rekindling and rediscovery</a> within their marriage. Indulge in the <a href="https://www.aarp.org/relationships/love-sex/info-01-2011/empty_nest_means_better_sex.html#:~:text=A%20stimulating%20life%20outside%20the,answers%20questions%20at%20goodinbed.com.">privacy</a> you now have; date your partner; reexperience romance. Just as you have changed over the last 18+ years, it’s likely that your spouse has as well. Get to know them again! Many couples take a trip together to ignite this period in their lives. 
 <li>Get help if you need it. There are many counselors or psychiatrists who specialize in grief and parent-child relationships. Don’t hesitate to seek professional help if you feel like you are really struggling, or that you are becoming depressed. 
</ol>
 
Once you’ve given yourself and your spouse the time and space to grieve, and you’ve begun to plan this phase of your life, you may find that your house has grown too large. Many empty-nesters do choose to <a href="https://www.usatoday.com/story/money/2019/02/04/retirement-savings-why-empty-nesters-should-downsize-homes/2444729002/">downsize</a>, swapping their large house out for something smaller. As you approach retirement, you will need to think about your long-term housing options. Do you want to search for a smaller house, a townhome, or a condo? Do you want to age-in-place in your current abode? Are you saving up to move to a retirement community? There is no one-size-fits all option for housing as one approaches their senior years; different choices suit different people. It’s important to <a href="https://www.unison.com/blog/downsizing-vs-aging-in-place/">do your research</a> and have an honest conversation with yourself and your spouse about your future–however distant from this moment–plans. 
 However you wish to proceed, your first choice may become more financially feasible if you tap into your home equity. A <a href="http://unison.com">Unison</a> equity sharing agreement is an innovative option that empowers you to access your equity and turn it into cash you can use; it’s different from the traditional home equity loan or line of credit (HELOC) because there is no added debt. Unison doesn’t require monthly payments, and doesn’t charge interest, instead opting for a percentage of your home’s change in value either in 30 years or at the time of sale. They’ve helped over 10,000 homeowners access their equity, many of whom have used the funds to renovate their homes to better age-in-place, save for retirement, or invest in the downpayment on a second property. <a href="https://www.unison.com/how-it-works/">Learn more</a> about Unison’s equity sharing agreements and whether they might be a good fit for you, your family, and your future plans, on their website. 

 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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If your child is making the transition to college this year, you yourself may be anticipating a transition of your own: the “empty nest.” Learn more about how to cope with this transformative stage in life in this blog post.

Coping With an Empty Nest | Unison

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Can’t decide between a HELOC or home equity loan? Explore the differences between home equity loans and lines of credit to see which option is right for you.

Home Equity Loan vs. HELOC: Which Is Best for You? | Unison

By Lauren Rosales, Content Writer

 Our country has an undeniable history of housing inequality. The <a href="https://www.npr.org/2017/05/03/526655831/a-forgotten-history-of-how-the-u-s-government-segregated-america">redlining practices</a> of the 1930s which segregated cities and likewise barred nonwhite, non middle-class demographics from the budding suburbs, have had a <a href="https://www.nationalgeographic.com/science/article/racist-housing-policies-created-some-oppressively-hot-neighborhoods">lasting effect</a> on the nation’s communities and <a href="https://www.enterprisecommunity.org/blog/how-racist-housing-policies-past-impact-present">continue to impact</a> our society. 



 In the larger conversation about homeownership race gaps, one demographic about which we tend to hear a bit less is Asian Americans and Pacific Islanders (AAPI). While the homeownership rate of White Americans is 74%, that of Asian Americans is <a href="https://chicagoagentmagazine.com/2021/10/04/removing-barriers-to-asian-american-homeownership/">just under 60%</a>. Yet as the <a href="https://www.pewresearch.org/fact-tank/2021/04/09/asian-americans-are-the-fastest-growing-racial-or-ethnic-group-in-the-u-s/">fastest growing racial or ethnic group</a> in the United States since 2000, AAPI have also experienced the <a href="https://www.urban.org/urban-wire/more-asian-americans-are-becoming-homeowners-they-still-face-barriers-housing-market">largest homeownership rate increase</a> from 1980 to 2019. 

 However, the exceedingly diverse nature of the AAPI community is often overlooked. “Asian American and Pacific Islanders” is a broad label that identifies people from <a href="https://usa.ipums.org/usa-action/variables/RACE#codes_section">over 40 different countries</a>. Between subgroup demographics, <a href="https://www.tandfonline.com/doi/abs/10.1080/05775132.2018.1443998">both wealth and homeownership inequality</a> is pervasive. 
 

 The Urban Institute, a nonprofit research organization, published a 2021 analysis of the six Asian ethnic groups with the largest populations in the United States, and their homeownership statistics and trajectories. Vietnamese people, they found, have the highest homeownership rate among AAPI groups; however, they also have the most mortgage denials and the lowest median home values. The Urban Institute speculates that the higher homeownership may be due to <a href="https://www.migrationpolicy.org/article/vietnamese-immigrants-united-states-5">mass immigration</a> after the Vietnam War. In 2017, <a href="https://www.pewresearch.org/social-trends/fact-sheet/asian-americans-vietnamese-in-the-u-s-fact-sheet/">only 26% of Vietnamese immigrants</a> had a bachelor’s degree, or higher–compared to 31% of immigrants overall. In their report, the Urban Institute illustrates a domino effect where lower educational attainment results in lower-paying employment, which in turn results in being unable to afford more expensive housing. 
 

 Such nuances are completely missed when statistical analyses squash each unique AAPI group together under a single label. In addition to which, that practice erases the individual histories and diverse range of experiences that belong to each separate ethnicity. For example, the Urban Institute report describes the key historical context which informs the conspicuously low homeownership rate for Koreans over the age of 65 (55%, roughly 15 percentage points lower than other AAPI groups)--Korea’s rapid transition from “a low-income to high-income country” meant Korean immigrants prior to the 1990s <a href="https://www.jstor.org/stable/43783289">tended to have lower incomes</a>. Younger Korean individuals who have immigrated more recently have higher incomes, and thus their homeownership rate more closely resembles that of other AAPI groups of the same age range.
 

 
For decades, the <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4738850/">“model minority” stereotype</a> has allowed the perpetuation of a myth that, thanks to an ingrained hard work ethic, Asian Americans have “made it”; in other words, they no longer experience forms of prejudice or racism. When studies ignore or overlook the intricacies of subgroups within the AAPI label, they further sanction this assumption and ultimately ensure that it remains uninterrogated, normalizing it into accepted “fact.” 

 The statistics may initially seem to support this myth. Educational attainment and household income are two key factors that contribute to the rate of homeownership, and AAPI as a whole, according to <a href="https://www.urban.org/urban-wire/more-asian-americans-are-becoming-homeowners-they-still-face-barriers-housing-market">aggregated data</a>, have the highest rate of both. According to the Urban Institute, in 2019, 43% of Asian people had bachelor degrees and an entire third of Asian households had an income of over $150,000. Comparatively, 29% non-Hispanic white people held bachelor’s degrees and 22% of white households had incomes exceeding $150,000. However, the Urban Institute points out that if one controls specifically for income and education level, the rate of homeownership for AAPI is exceedingly lower than the white population; for example, white households without high school diplomas have a home ownership rate of 13 percentage points higher than that of AAPIs. At each income level, AAPI homeownership rates are much closer to other minority groups. And as we have seen, the homeownership rate is disparate between subgroups within the AAPI community as well due to <a href="https://www.pewresearch.org/fact-tank/2018/07/12/key-findings-on-the-rise-in-income-inequality-within-americas-racial-and-ethnic-groups/">extreme wealth gaps</a>.


 
The home is frequently one’s <a href="https://www.nahb.org/blog/2021/02/homeownership-remains-primary-driver-of-household-wealth/">largest financial asset</a>, and the most solid foundation on which a household can build their wealth. This wealth-building can take the shape of extracting equity to pay down debt, increasing the home’s value with renovations, or diversifying one’s financial portfolio via additional outside investments. Unsurprisingly, continued homeownership gaps of the past several decades have resulted in a dearth of intergenerational wealth amongst people of color in all minority groups. There are some challenges and barriers to homeownership that are experienced particularly, or more frequently, by AAPI groups; for example, a great deal of cost burdened AAPI households are of <a href="https://escholarship.org/uc/item/94v9w6b5#article_main">Limited English Proficiency</a>. According to an article for the UCLA Center of Neighborhood Knowledge, 54% of such households are Limited English Proficient, compared to only 9% of cost burdened White households. In addition, AAPI groups are more likely to live in multigenerational households. The same report specifies that Asians are four times more likely to do so, and Native Hawaiians and other Pacific Islanders (NHOPI) are seven times more likely, resulting in overcrowding and extreme cost burdens. 

 
The National Coalition for Asian Pacific American Community Development (National CAPACD, pronounced “National Capacity”) has developed a <a href="https://www.nationalcapacd.org/campaigns-initiatives/housing-counseling/">Housing Counseling Network</a> which contains 17 organizations serving AAPI communities across 15 geographic areas. Housing Counseling Agencies like these provide assistance to renters, homeowners, and potential homebuyers–all of low-to-moderate income–who need help navigating housing issues from a source who can speak their native languages and is familiar with their individual cultures. Such agencies are a vital source of support in the ongoing and often invisible struggle for housing equality for AAPI communities. 

 Ultimately, this country has a long way to go before housing inequality is a thing relegated to our past and not our present. As the population of AAPIs continues to climb, it is key that researchers and policymakers break from the problematic tradition of lumping all included ethnicities into a single category, as it leads to misleading aggregated data which erases diverse identities and obscures those who would benefit from targeted assistance.


 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

Asian American & Pacific Islanders are often excluded from conversations on housing inequality & the homeownership race gap. Find out how this happens, & why it’s a problem.

Asian Americans, Pacific Islanders, and the Homeownership Race Gap 

By Lauren Rosales-Shepard, Content Writer

 The older population in the United States is greatly increasing, with the number of seniors (those 65 or older) <a href="https://www.prb.org/resources/fact-sheet-aging-in-the-united-states/">expected to almost double</a> by 2060. Life expectancy, too, has climbed. As a result, a growing number of homeowners find themselves en route to retiring into a conundrum: do I stay in my home and age in place, or do I downsize? 


 The pros and cons of each option seem at first obvious. If you downsize to a smaller home, you will have much less space to maintain (especially yard-wise!). On the other hand, if you stay in your home and age in place, you’re in your home–you know the space, the community, already. Downsizing requires moving, and when has that ever been anyone’s idea of A Good Time? But your current home is full of empty rooms, now that your children have grown up and flown the coop; it can be lonely. 


 It’s a tremendously weighty decision. Like any life-altering choice, there are complexities to consider, and there is no one-size-fits-all solution. 

 Downsizing

 If the members of your household have dwindled to two or one, you would undoubtedly embrace being responsible for less space. You would have fewer rooms to clean if you downsized, not to mention less (if any) yard to mow and rake. Plus, were you to relocate, you might possess the luxury of choice–without needing to be near a job, you could choose to be near family, or in a more appealing climate, for example. 

 

 Homeowners who look to relocate into a smaller autonomous home may, however, run into severe cost issues. Purchasing a home in today’s market will subject one to skyrocketing mortgage rates amidst <a href="https://www.aarp.org/money/budgeting-saving/info-2022/inflation-biggest-price-increases.html">ever-rising inflation</a>. Both of these factors may make it more difficult for you to sell your current home for the funds to purchase a new one—that is, if you can even find one! There is a extreme <a href="https://www.npr.org/2022/03/29/1089174630/housing-shortage-new-home-construction-supply-chain">housing shortage</a>. In addition, there is an even more blatant scarcity of smaller homes, as they are simply <a href="https://www.cnbc.com/2018/09/11/baby-boomers-are-struggling-to-downsize--and-it-could-create-the-next-housing-crisis.html">no longer being built</a>. But seniors who would be open to apartment-living (no yard!) face an obstacle, too: the paucity of multifamily housing. Nationwide, there is <a href="https://www.theatlantic.com/ideas/archive/2022/06/zoning-housing-affordability-nimby-parking-houston/661289/">very little zoning that permits</a> multifamily housing to be built. Zoning often not only prohibits multifamily dwellings in particular, but also might <a href="https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/03/15/as-rents-soar-states-take-aim-at-local-zoning-laws">limit the heights of buildings</a> and include minimum lot-size and square-footage requirements. Those apartments that can be built tend to be luxury condos, or publicly-subsidized low-income housing–nothing in the middle, which is often the space that seniors on a fixed income would financially occupy. 



 Similar dynamics exist in the senior living industry, which is continuously innovating to present desirable options to aging adults of means. Senior living facilities often put on social events, and promote opportunities for residents, however independently they are able to live, to meet, mingle, and form friendships. This is great news for one’s health, as social isolation and loneliness frequently have deleterious effects on seniors–indeed, the related health risks are <a href="https://www.artandhealing.org/older-adults-loneliness-fact-sheet/?gclid=Cj0KCQjwqoibBhDUARIsAH2OpWh5t2hl_mi5ohmU1IgZHO3I5mXY_g-URXE6l9UmlNVGESIwHO9WEbwaAv5GEALw_wcB">comparable to that of smoking and obesity</a>! Frequent social interactions can <a href="https://www.dementiacarecentral.com/caregiverinfo/handsoncare/socialization/#:~:text=Social%20interaction%20is%20healthy%2C%20like,more%20exercise%2C%20and%20better%20sleep.">slow symptoms of dementia</a> in aging adults. 

 

 A <a href="https://www.nytimes.com/2022/07/19/business/senior-housing.html">recent New York Times article</a> describes a recently-developed “luxury senior living community” featuring five restaurants, an outdoor pool, landscaped courtyards, highly-trained wellness staff, and an on-site “care coordinator.” The proximity of so many necessities and amenities alike are especially enticing to not only the <a href="https://aginginplace.org/aging-in-place-vs-assisted-living/">50% of seniors</a> who don’t believe their community has reliable or effective public transportation, but also the more than <a href="https://aginginplace.org/aging-in-place-vs-assisted-living/">25% of older adults</a> in their 60s who fear their communities don’t have the resources they will need as they age.



 Unfortunately, however, the level of comfort and security ensconced in a development like the one mentioned in the article does come at considerable cost. Monthly rental rates at that particular abode range from $7,900 for a simple studio to $16,660 (and up!) for two-bedroom apartments. And although there are less extravagant options (the same article mentions a development where residents will volunteer for 10 hours each month to cut down on costs, for example), even these require an upfront payment of hundreds of thousands of dollars in addition to monthly rents. While this level of wraparound support in a housing arrangement might be the ideal scenario for many seniors, it also might not be a realistic option for many homeowners looking to downsize.


 Aging-in-Place 

 According to AARP surveys, 90% of seniors (65+) <a href="https://www.aarp.org/livable-communities/about/info-2018/aarp-livable-communities-preparing-for-an-aging-nation.html#:~:text=A%20conundrum%20we%20face%20is,and%20their%20doctors%20know%20them.">want to age in place</a>–in other words, to remain in their current homes. The main reason for this preference is a desire for <a href="https://academic.oup.com/gerontologist/article/60/1/50/5272551">social connectedness</a>; those who are already familiar with and active in their communities do not want to lose that built-in social network. Although many assisted living facilities, retirement homes, and luxury senior living developments do feature social activities and engagement, it is daunting for anyone to start from scratch and facilitate new friendships. It can be even more difficult for an aging individual who is more likely to <a href="https://gero.usc.edu/students/current-students/careers-in-aging/the-value-of-aging-in-place/">want to cling to the familiar</a>. 


 Familiarity is also key to a sense of agency and independence. While a new neighborhood could be difficult to navigate, if one were to age in place it might be easier to satisfy the basic needs–groceries, clothing, appointments, etc–without help. Access to affordable transportation options <a href="https://t4america.org/docs/SeniorsMobilityCrisis.pdf">tends to be scarce</a>, and so those aging adults who cannot or do not drive themselves become isolated and are far less likely to take active steps for self-care. Those who opt to age in place frequently do so because it seems like the best way to <a href="http://ojs.westeurope.cloudapp.azure.com/Notebooks/article/view/200/175">maintain their autonomy</a> for as long as possible. 



 There are <a href="https://www.habitat.org/our-work/aging-in-place">significant factors</a> to take into account when considering aging in place. Do you foresee yourself needing assistance with activities of daily living? Will you require help with chores and additional home/yard maintenance? Even if you don’t think that either of these possibilities belong to the near future, it’s important to make a plan just in case. This plan can include at least budgeting for various potential <a href="https://eldercareguide.com/home-modifications-and-repair/">home modifications</a>, as well as for services you may later need–lawn care, snow removal, grocery delivery, dog-walking, routine in-home medical care, etc. If you live in a two-story house, you should be especially cognizant of the <a href="https://seniorsafetyadvice.com/how-to-make-a-two-story-house-elderly-accessible/">potential renovations</a> that you may require: installing or tightening handrails, placing extra lighting and non-slip material on the stairs, even installing a lift in case of extreme loss of mobility. <a href="https://dailycaring.com/home-modifications-for-seniors-a-room-by-room-guide/">Bathroom renovations</a>, in particular, may need to be extensive. You may want to consider whether it is possible to relegate your daily life to the main floor alone, as well. 

 There are many resources available to seniors who wish to age in place. Habitat for Humanity, for example, has an <a href="https://www.habitat.org/our-work/aging-in-place?gclid=Cj0KCQiAmaibBhCAARIsAKUlaKRxw7ymByzx7mL_HWPxr_YUDKWUZAlThpDO7Zexa6lHHoMmDkmyABsaAqs7EALw_wcB">Aging in Place program</a> that collaborates with human services organizations to help provide home repairs and modifications to the homes of seniors. USAging is the national association that represents the nationwide network of Area Agencies on Aging; they have many resources for <a href="https://www.usaging.org/transportation">transportation</a>, <a href="https://www.usaging.org/elderjustice">elder justice</a>, <a href="https://www.usaging.org/caregivers">caregiver supports</a>, and <a href="https://www.usaging.org/content.asp?contentid=1281">referral assistance</a>. The <a href="https://eldercare.acl.gov/Public/Index.aspx">Eldercare Locator</a> is also a public service provided by the U.S. Administration on Aging, and features a hotline fielded by specialists who can answer questions and connect seniors to resources in their communities. Individual states have specific resources that can usually be found by searching their Health and Human Services websites, too. If you have extra space and are worried about getting lonely, third-party services exist that can even help you find a compatible housemate! 

 An important consideration for anyone considering retirement is the affordability of housing. The Urban Institute recently reported that most older Americans are <a href="https://www.urban.org/urban-wire/middle-income-seniors-face-gap-housing-and-health-supports">woefully unprepared</a> to pay for their living expenses once they retire. Because the number of senior homeowners who have mortgages has <a href="https://www.urban.org/research/publication/what-2016-survey-consumer-finances-tells-us-about-senior-homeowners">nearly doubled</a> since the late 1980s, and those mortgage balances have been sharply increasing, retired seniors frequently find themselves with monthly payments with which they simply cannot keep pace. Imagine adding the cost of necessary home modifications to those already encumbering costs. 


 One solution to this problem is for aging homeowners to <a href="https://www.urban.org/urban-wire/american-seniors-prefer-age-place-whats-right-place">tap their home equity</a>. As the Urban Institute points out, however, many of the vehicles with which seniors can do this are less than ideal. Home Equity Lines of Credit (HELOCs) merely add to a homeowner’s burdensome list of monthly payments, and because many have variable rates, the interest can unexpectedly and drastically increase. Cash-out refinances can be risky, too, due to interest rate increases–plus, they require an income to support the mortgage debt. 



 However, a <a href="https://unison.com">Unison</a> equity sharing agreement neither requires monthly payments nor incorporates interest. Qualifying homeowners can receive up to 17.5% of their home’s current value in cash, or up to $500,000. Rather than monthly payments, the homeowner pays back the original amount, plus a percent of the home’s change in value, when the home is sold. A recent survey of Unison homeowners found that the two most popular uses of their agreements was to consolidate (or eliminate) debt, and to renovate their homes. The savvy planner looking ahead might see both of these as key components to preparing one’s home and finances for aging in place. 



 The most important thing to consider is what works best for you. There is no one right answer for everyone. Aging-in-place may be statistically popular, but <a href="https://www.sciencedirect.com/science/article/pii/S0890406520300402">not all places are suitable</a> for that plan. You must think of your own priorities, financial situation, as well as health profile to make the most logical, beneficial decision. Be sure to talk to your doctor, your family members, and your heirs to gather the most relevant and informed perspectives. 



 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Planning for retirement is stressful, and with life expectancy climbing for seniors, a key decision must be made: does one downsize, or try to age in place?

Downsizing vs Aging-in-Place | Unison® Equity Sharing

By Lauren Rosales-Shepard, Content Writer

 For years you’ve heard that real estate is one of the <a href="https://www.cnbc.com/2019/10/01/real-estate-is-still-the-best-investment-you-can-make-today-millionaires-say.html">best investments</a> you can make. It’s considered something of a safe bet; unlike the literal dollar, real estate <a href="https://www.forbes.com/sites/forbesrealestatecouncil/2021/02/17/eight-reasons-you-should-consider-real-estate-investing/?sh=1f02cd075c51">doesn’t lose value to inflation</a> over time. Plus, real estate investing is a tax savvy way to diversify your portfolio, as there are <a href="https://www.rocketmortgage.com/learn/tax-benefits-of-real-estate-investing">many write-offs</a> available to you, as well as other benefits. And don’t forget the largely passive income boost! Where do I sign up?



 However, there are many ways to invest in real estate. You could buy a house or a condo, and rent it on a yearly lease. You could also rent a whole house or individual unit as an AirBnb or other short-term rental. That said, there are other ways to invest in real estate without becoming a landlord or host of any kind! Let’s take a closer look at each of these possibilities to get a better idea of what might work best for you.

 REITs
 Perhaps you’re thinking, “Owning my own home is stressful enough!” If you don’t want the added responsibility of being accountable for the functionality of somebody else’s living space–or the anxiety of finding a tenant who will treat that space kindly–then you may want to eschew purchasing an investment property altogether. However, you can still invest in real estate by purchasing shares of a real estate investment trust (<a href="https://www.bankrate.com/investing/reit/">REIT</a>). REITs are companies that own, finance, or manage various properties; they pay the majority (90%) of the rental (or other) income out to the investors who finance them. 

 With an REIT, you benefit from capital appreciation and <a href="https://www.investopedia.com/terms/r/reit.asp">receive dividends</a>. (Note, however, that those generous dividends are in fact taxed as <a href="https://www.investopedia.com/terms/o/ordinaryincome.asp">ordinary income</a>). And in addition, because a single REIT has a large variety of properties in its portfolio, your shares are automatically <a href="https://www.thebalancemoney.com/advantage-of-real-estate-investment-trusts-2867051">diversified</a>. That diversification cuts down on the risk, as it spreads your figurative financial eggs into many, many baskets. However, REITs tend to perform poorly <a href="https://www.investopedia.com/articles/investing/031915/what-are-risks-reits.asp">when interest rates are high</a>, and can sometimes be at the mercy of real estate trends over which you can have no control. (Consider the <a href="https://www.businessinsider.com/american-mall-decline-150-left-10-years-how-many-2022-10">increasingly defunct</a> suburban shopping malls, for example). 
 

 While purchasing shares in an REIT doesn’t come with the responsibilities of being a landlord, there are still risks and potential pitfalls. 



 Renting Out an Investment Property
 Let’s say that you aren’t at all discomfited by the idea of taking on additional landlord responsibilities. Perhaps your family has outgrown your current home, and you think it might be worthwhile to rent it out after you move, rather than sell it. If you don’t relocate to another locale, you can keep an eye on the property and be fairly available to your tenant. Or, you might have your eye on a particular property–say, a condo in the increasingly trendy downtown area, or a duplex near the local university. What are the benefits of such an arrangement?

 

 You could see a return on investment (<a href="https://www.rocketmortgage.com/learn/roi-real-estate">ROI</a>). Think about it; over time, the rents you collect can pay off the mortgage and account for any maintenance costs. Once you’ve paid that mortgage, those monthly rents go straight into your bank account, saved for a rainy day. That’s the obvious perk. There are also <a href="https://www.investopedia.com/articles/investing/051515/pros-cons-owning-rental-property.asp">some tax benefits</a>, like the ability to deduct your insurance, mortgage interest, maintenance costs, and other ordinary and necessary experiences. 



 However, leasing a property to a tenant has some inherent risks involved. Despite the careful language you may place in the lease, there’s no guarantee that a tenant is not going to be destructive or irresponsible. You might require them to put down a security deposit; however, if they don’t pay their rent on time, chain smoke in the living room, and have a secret cat who destroys the carpets, that probably won’t be much consolation. 



 It’s also important to note that a rental property is not a liquid asset. In other words, you can’t just cash it in, on the spot, if you need money. It can take months to sell a property–plus, you’ll incur taxes on the profit!--and you can’t eject a tenant before their lease expires just because you have a sudden expense. You may also experience difficulties with unexpectedly rising taxes and insurance premiums, or a swift shift in neighborhood desirability, that makes the asset much less lucrative. 



 Don’t forget, too, that you may find yourself driving across the city at two o’clock in the morning to deal with a heater that stopped working. If you hire a property manager, it can save you such headaches; however, that convenience can cost you <a href="https://www.rockethomes.com/blog/home-selling/should-rent-out-first-home">between 8-12%</a> of the monthly rent. 


 "AirBnbing It"

 While renting a unit or a house on a yearly lease will grant you regular income, converting a space into a vacation or temporary rental–for listing on apps like AirBnb or Vrbo–is increasingly popular. In 2021, worldwide revenue for vacation home rentals totalled <a href="https://www.statista.com/outlook/mmo/travel-tourism/vacation-rentals/worldwide#revenue">a staggering $57.94 billion</a>! Though AirBnb (and Vrbo, for that matter) charges <a href="https://www.igms.com/airbnb-service-fee/">a service fee</a>, the platform takes care of payments, and markets the property. And you wouldn’t be a landlord per se, so much as a host–you can take however many bookings as you want, instead of being on call 24/7 for a tenant. 
 

 There is also more flexibility in short-term vacation rentals. While a lease locks a tenant into a specific monthly rent for an entire year, you have the ability to change your prices for an AirBnb based on a variety of factors. Friday and Saturday nights, for example, might be listed as a higher rental price; summer months could cost more than the dead-of-winter (unless your property is near fabulous skiing, of course). 



 Although selecting a responsible long-term tenant can be tricky, you take that risk hundredfold when you imagine how many renters with whom you might contract via AirBnb. Unless you especially wish to go this route, you might run into trouble with those seeking a so-called 
<a href="https://www.texasmonthly.com/news-politics/inside-bro-tastic-party-airbnb-gentrifying-east-austin/">“party house.”</a> If that happens, you will be responsible for getting the space spick and span again–including replacing any broken furniture!--in time for your next rental. 


 Speaking of furniture, a considerable added cost to running a short-term rental is the need to furnish and stock the space. Since one of the major perks for many vacationers to renting a home or apartment unit is the use of a kitchen, you will need to remember to include basic dining and cooking implements, as well as pantry ingredients. A long-term tenant will bring her own furniture and buy her own toilet paper; you will have to purchase the entirety of both for an AirBnb. And since the competition can be pretty high, you won’t want to skimp, either. Attractive rooms and luxurious furnishings are increasingly the mainstay of short-term rentals. Haven’t you ever searched for an AirBnb that specifically had a hot tub? 


 If you want to list a short-term rental, you will need to diligently look into your city’s laws and regulations. Some may not allow them, and others will require a permit–and if you see fit to skip the latter, you may be looking at an enormous fine. In many cities, AirBnbs are seen as a <a href="https://www.vice.com/en/article/vbx588/airbnbs-gentrification-problem-podcast">vanguard of gentrification</a> and propagator of <a href="https://www.kvue.com/article/money/economy/boomtown-2040/airbnb-austin-housing-issues/269-53065189-c1f7-46e9-85d1-1a897375dfb5">affordable housing shortages</a>; therefore, cities from <a href="https://www.nytimes.com/2022/07/12/nyregion/airbnb-lawsuit-short-term-rental.html">New York City</a> to <a href="https://www.dallasnews.com/news/2023/02/17/plano-has-a-short-term-rental-problem-heres-what-arlington-did-to-solve-the-same-issue/">Plano, TX</a>, and <a href="https://www.wwno.org/2023-01-27/planning-commission-endorses-block-caps-for-new-orleans-short-term-rentals">New Orleans</a> to <a href="https://www.wcax.com/2022/12/12/morristown-cracks-down-short-term-rentals-fight-housing-crisis/">Morristown, VT</a> are combatting the prevalence of short-term rentals in their vicinities. With the situation in flux, it may not be an ideal time to dip one’s toe in the water, so to speak.


 If you’re considering a real estate investment of any kind, you’ll want to go above and beyond doing your due diligence. Like many things in life, there is no one-size-fits-all model for real estate investment. Obviously, any type of large investment is a huge decision which necessitates a gargantuan amount of research. Whatever investment pathway you pursue, a <a href="https://unison.com">Unison</a> equity sharing agreement may help secure the starting capital you need to diversify your portfolio. 



 
Our equity sharing agreements are designed to empower homeowners like you to live the life they’ve always wanted, by giving them a liquid slice of your home equity in exchange for a percentage of your home’s future change in value. Unlike a HELOC or home equity loan, we don’t require monthly payments or charge interest–that means no added debt! Unison does have an owner-occupancy requirement,so if you are interested in liberating the equity in your home to fund an investment opportunity, know in advance that you will need to occupy that home at least 180 days out of every 365-day period and must never be away for 60 consecutive days.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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If you’re thinking about getting an investment property, you might be wondering whether it’s best to rent it outright, list it on AirBnb, or entertain an entirely different option. Let’s look into each and weigh the pros and cons. 

AirBnB vs Traditional Renting | Unison® Home Equity Sharing

By Lauren Rosales-Shepard, Content Writer

 For years you’ve heard that real estate is one of the <a href="https://www.cnbc.com/2019/10/01/real-estate-is-still-the-best-investment-you-can-make-today-millionaires-say.html">best investments</a> you can make. It’s considered something of a safe bet; unlike the literal dollar, real estate doesn’t lose value to inflation over time. Plus, real estate investing is a tax savvy way to diversify your portfolio, as there are many write-offs available to you, as well as other benefits. And don’t forget the largely passive income boost! Where do I sign up?



 But, when you wake up on Saturday morning, you are dismayed to discover that it has snowed. A lot. It’s 20 degrees outside and windy–so, it “feels like” 6. You have never wanted to do anything less than abandon your fuzzy robe and find your thick, unfashionably practical winter gloves to proceed outside into the arctic abyss, armed (only) with a shovel. For a moment, you sit on the edge of your bed and wonder, “What would happen if I just didn’t do it?”


 It is a truth universally acknowledged that nobody wants to shovel their sidewalks. Nor do they desire to climb a slick ladder up to their roof, or spray tacky-looking foam from an aerosol ‘round the pipes leading from the washing machine to a mysterious outdoor location. Yet, as homeowners, these are tasks that we can’t pass off to obliging landlords–and, yes, we really do need to do them. As partners to our homeowners who want them to always win, we've looked into the WHY of winter maintenance, and collected a few tips along the way! 

 Spray Foam, Pipes, and Crevices

 Let’s tackle the unattractive foam first. Spray foam is composed of <a href="https://heartlandinspections.com/can-you-use-spray-foam-around-hot-water-pipes/">polyurethane and a catalyst</a>, the latter of which causes the foam to rapidly expand when it is sprayed on an area. That expansion is what makes it ideal for filling cracks, gaps, and crevices, as well as encompassing pipes as an additional warming layer. You can find the sprayable foam at any hardware store; in fact, there tends to be such a surplus of varieties that you will need to double-check that you’ve chosen the right one for your particular project. A couple of things to remember: firstly, clean the area before you spray, because dust and other contaminants could interfere with the chemical process that expedites the foaming; secondly, you really do need to generously and enthusiastically shake the can for a full minute before starting to spray, in order to get that chemical process going! 

 True, it’s not the most scenic addition. But, consider the benefits! Insulated pipes are less likely to freeze, or to produce condensation that can cause other problems. When you prevent cold air from entering the house through cracks, you not only keep your space warmer, but you can save money on your energy bills. A spray foamed seal is <a href="https://www.usiinc.com/blog/spray-foam-insulation/advantages-spray-foam-insulation">as much as 24 times less permeable</a> to outside air–now, translate that into dollars per month! If you’ve been noticing a winter surge in your energy bills, you may want to explore this option.



 Ice Dams and Roof Maintenance
 Spraying foam from an aerosol can is unquestionably easier than trying to perform roof maintenance in the dead of winter. However, it might be necessary to do it if your area experiences heavy snowfall or an ice storm. 

 

 First thing’s first: always remember to clean out your gutters before fall morphs into winter. If you don’t, the crispy leaves, abandoned acorns, and other autumnal detritus will be <a href="https://www.houzz.com/magazine/your-winter-home-maintenance-checklist-stsetivw-vs~55572864">perfectly positioned to cause water backups</a> when snow or freezing rain fall, leading to leaks, ice dams, and other damage to the roof and siding. Although your roof may still need urgent attention in the winter, taking this action preemptively will ensure it is much less likely! If you live in a region that regularly receives heavy snowfall, you might also consider installing heated cables (again, before winter hits!) that you can simply switch on to melt snow and ice after each storm. 



 But, let’s say that you either forgot to take preventative measures, or you just have bad luck. You’ve noticed that icicles, though rather picturesque, have unfortunately begun to form <a href="https://www.heatizon.com/blog/blogroll/roof-deicing-ice-melt/5-signs-you-have-an-ice-dam">along the gutter edge</a>. Those gutters don’t seem to be draining, either. These are signs of an ice dam, and you will need to take action quickly! However, don’t take to your ladder with a hammer, chisel, or mallet and start using brute force against the ice; you are fairly likely to do even more damage to your shingles. Instead, you can employ a long-handled roof rake from the safety of the ground. The rake can remove snow build-up, and the friction from a wheeled rake in particular can alter the temperature enough for the ice to melt. (Protip: using a roof rake after a heavy snowfall is also a good idea in general). 



 A less conventional method to dealing with ice dams involves–of all things–pantyhose! If you fill <a href="https://www.thisoldhouse.com/roofing/21017660/how-to-get-rid-of-ice-dams">one leg of pantyhose with calcium chloride ice melter</a> and then lay it onto the roof so that it crosses the ice dam and hangs over the gutter, the melter will get to work and conveniently carve a channel from which water can flow off the roof. Voila! 



 Shoveling 

 Very few people enjoy the manual labor of shoveling their driveway and the sidewalks in front of their house. Here’s the thing: it really needs to be done. 

 To start, let’s look at this from a legal standpoint. <a href="https://www.rentecdirect.com/blog/the-complete-guide-to-snow-removal-laws-by-state">Each state</a> (and sometimes city) has different laws about the need to shovel your sidewalk, as well as requirements regarding how quickly. In Omaha, Nebraska, homeowners (or tenants, as the case may be) have 24 hours to clear snow, or they will face a hefty fine. Just how hefty? One man faced <a href="https://www.wowt.com/content/news/Landlord-shocked-by-high-fine-after-snow-wasnt-cleared-at-property-508299221.html">a $1,600 fine</a>. At the very least, most of us are legally obligated, by city ordinance, to shovel sidewalks swiftly. 



 However, if you live in one of the states that does not have a law in place (Alabama, for example), if someone is injured in an accident that occurs on your property as a direct result of snow or ice that has been neglected, you could certainly find yourself <a href="https://www.heslinlawfirm.com/blog/importance-of-shoveling-your-sidewalk.cfm">being sued</a>. It’s also basic, neighborly etiquette. 

 When it comes to your driveway, you are unlikely to sue yourself if you slip and fall. However, it is still prudent to remove the possibility, for the sake of avoiding bruises or even more serious injuries. In addition, if the snow melts and then freezes into ice, it <a href="https://sbclandscaping.com/what-happens-if-you-dont-remove-the-snow-from-driveway/">may start to crack</a> your driveway. Then water will seep into those cracks over time, freezing and expanding, and the driveway will need expensive repair. Plus, if you continue to park and repark your car in a snowy driveway, the constant moisture might <a href="https://www.ehow.com/info_12038792_dangers-not-shoveling-driveway.html">begin to rust</a> the underbelly of your vehicle. 

 So, you should definitely shovel the sidewalk and the driveway. That said, it is important to do so carefully. If you aren’t usually an active person, suddenly undertaking this level of manual labor might be tough on your muscles, joints, and even your heart. The cold also increases the chance of experiencing <a href="https://www.nsc.org/community-safety/safety-topics/seasonal-safety/winter-safety/snow-shoveling">a blood clot</a>. It’s a good idea to stretch before shoveling, and to take it slowly. Don’t forget to push the snow more than lifting it; if you do need to lift some at times, be sure to do so with your legs and not your back! It may also be best to shovel in shifts, rather than all at once.


 Ultimately, it is worth it to postpone the crime novel and the second pot of coffee to take care of post-snow maintenance on and around your house. Be careful, and stay warm! 



 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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We know there’s certain stuff we’re supposed to do to take care of our homes during the snowy season. But what would happen if we just… let it slide? 

Winter Maintenance Tips | Unison® Home Equity Sharing

By Lauren Rosales-Shepard, Content Writer

 It’s impossible not to notice that extreme weather and natural disasters have increased over the past several years. From the <a href="https://www.nytimes.com/2021/02/20/us/texas-winter-storm-explainer.html">historically severe</a> Winter Storm Uri in Texas, which led to unprecedented loss of power across the state for days, to the destructive flooding in Florida following Hurricane Ian, described as “<a href="https://www.theguardian.com/us-news/2022/oct/03/hurricane-ian-death-toll-florida">the second-most-costly</a> storm to ever strike” the state, it’s obvious that something meteorological is afoot.



 That something is, of course, <a href="https://doi.org/10.1007/978-94-017-8598-3_2">climate change</a>.

 Warmer surface temperatures lead to more droughts, but also <a href="https://www.usgs.gov/faqs/how-can-climate-change-affect-natural-disasters">more intense storms</a>. Think of the increased water evaporating into the atmosphere as powerful fuel for storm development. Plus, the escalated temperatures in the ocean and the air cause stronger winds to propel tropical storms–combine that fact with rising sea levels, and you will see more intense and widespread hurricane damage! When those higher temperatures <a href="https://disasterphilanthropy.org/resources/extreme-cold">disrupt the polar vortex</a>, imagine an enormous leak that causes Arctic weather to bleed into traditionally warmer geographies. In short, everything goes haywire–precisely as we have seen.


 We know from watching news reports that any given natural disaster can lead to displacement and loss of life; we know, too, that extreme weather affects <a href="https://climatechange.chicago.gov/climate-impacts/climate-impacts-agriculture-and-food-supply">crops</a>. However, common knowledge tells us much less about the effect that climate change-driven natural disasters and extreme weather have on home values and other housing issues.


 Home Values

 According to a study of hurricanes and housing markets in Florida during the span of 2000-2016, <a href="https://doi.org/10.1016/j.jeem.2022.102770">home prices temporarily increased</a> in the years following a hurricane. The study also found that there was a decrease in home sales during that same subsequent period–usually, about three years. This negative supply shock tended to rebound after that time, perhaps reflecting the ability for homeowners in the affected areas to obtain insurance payments or financial aid from government agencies and repair any incurred damages. As a result, the study describes, the sale prices and buyer incomes return to “baseline” levels–but not below–and so over time, more than 25% of households possess higher incomes than before the hurricane hit. 



 An alternate study that analyzed Hurricane Sandy’s effects on the New York City housing market found that damaged properties did suffer the big, immediate drop in value that one might imagine. Those values did enjoy a partial recovery over time, likely due to repair and restoration, like the homes in Florida described above. However, unlike the previous study, this research <a href="https://doi.org/10.1016/j.jue.2018.06.005">discovered a “price penalty”</a> seemingly suffered by flood zone properties that were not themselves damaged by Sandy at all. The hypothesis: immense news coverage surrounding the storm may have sparked widespread awareness of the risk of flooding in that location, turning people off from purchasing homes there. It’s worth noting that the Florida study did not focus on one extreme storm, so the data were less likely to be affected by the same type of news-led notoriety. In other words, if the area is hit by a more extreme and therefore more ‘famous’ hurricane, home values are more likely to suffer, because more people will know about it.



 A 2018 study reached <a href="https://doi.org/10.1016/j.jfe.2018.09.002">a similar conclusion</a> in its analysis of the 2010 Fourmile-Lefthand Canyon forest fire. At the time, the fire was the most expensive ($217 million in property damages) in Colorado history, drawing attention to the correlation between wildfires, forested areas, and economic loss in the area. Resultantly, sale prices of homes in nearby areas–though unaffected themselves–experienced a 21.7% decline. Conclusion? The area received a well-known reputation as at-risk for especially costly wildfires, and potential homeowners were not keen to take that risk.


 More recently, a 2020 study considers the correlation between natural disasters, regional economic health, and home values. A robust local economy often yields higher home values; the inverse is also true. The study finds that a more diverse local economy–i.e. comprising a plethora of industries, rather than only one–is <a href="https://doi.org/10.1016/j.regsciurbeco.2020.103581">more likely to bounce back</a> from a period of adversity, including natural disasters. Home values, in turn, reflect those shifts. For example, imagine Las Vegas. The area relies very heavily on tourism–expensive tourism. Therefore, when something like the Great Financial Crisis of 2008 happens, or the COVID-19 pandemic, and people don’t take expensive vacations, Las Vegas tends to suffer enormous economic loss. During these periods, the home values also suffered a dramatic drop. The study found that the same holds true for communities impacted by hurricanes and other natural disasters; in those with more than one thriving industry, home values suffered far less. 
 

 It might not come as a surprise, but belief in climate change also affects home values/prices. A concept called “homophily” refers to a preference for owning a home in a neighborhood where the other inhabitants are similar to oneself. You can probably see where this is going; if there is a strong desire to live in a neighborhood where your neighbors have the same political signs in their front yards, it’s pretty likely that you and those neighbors are going to have identical opinions on whether or not climate change is real. A 2020 study finds that in neighborhoods where the majority believe in climate change, if those neighborhoods are projected to be underwater in future due to rising sea levels, there is <a href="https://doi.org/10.1093/rfs/hhz073">a 7% drop in home prices</a>. Logically, it follows that in neighborhoods that maintain climate change denial, the home prices likely remain unaffected. The Scientific American suggested last month that either denying or, at least, ignoring climate change and its associated risks has <a href="https://www.scientificamerican.com/article/ignoring-climate-risks-has-inflated-property-values-in-flood-zones/">inflated the property values in various flood zones</a>–by over 40% in some areas! 



 Demographic Shifts
 The extreme weather and natural disasters resulting from climate change <a href="https://doi.org/10.1016/j.gloenvcha.2021.102329">do not affect everyone equally</a>. Perhaps it’s common sense, but studies, too, show that those with lower incomes are more often unable to recover when natural disasters strike their communities. Underrepresented and otherwise marginalized groups do not have access to prevention and mitigation measures, not to mention timely recovery efforts, or financial resources to help them rebuild. 

 A 2022 study analyzes the homeowner response in areas affected by Hurricane Andrew in 1992, and finds that the “<a href="https://doi.org/10.4337/9781035301614.00030">economic capacity to adjust</a>” seems to rule the results. After Andrew, the most financially vulnerable tended to move into low-rent housing in the hardest-hit areas, as it was all that they could afford. Middle-income households frequently abandoned the area entirely, choosing to relocate to somewhere with less risk association. On the other hand, the wealthy most often opted to remain, due to their ability to afford increased insurance protection, costly repairs, and future protection. 
 

 An earlier 2012 study of the housing aftermath of Hurricane Andrew finds, too, that the powerful storm led to <a href="https://doi.org/10.1068/b37121">widespread property abandonment and vacancy</a>. This result was most prevalent in neighborhoods and communities that were already in decline when Andrew hit, and the study shows that abandoned properties tend to have a “spillover effect” that, in the long term, leads to increased vacancy in the surrounding areas. Though a decade apart, these two studies of the same hurricane reach the same conclusion: low income households and communities who are affected by natural disasters are least likely to recover–ever–from those events. In fact, with the increasing occurrence of extreme weather that is triggered by climate change, it’s highly probable that these vulnerable populations will find themselves in consistently worsening circumstances due to both the likelihood of repeating hurricanes and their increasing inability to afford to move away from the area.


 There is an <a href="https://www.tandfonline.com/doi/full/10.1080/10527001.2020.1838172">uptick in missed mortgage payments</a> after a natural disaster hits, a 2020 study finds. Such data may not be surprising; after all, the sudden onslaught of pricey and necessary repairs could throw virtually anyone’s monthly budget out of whack. However, the study also finds that many of these mortgage delinquencies lead to foreclosure–in other words, one missed payment evolves into too many, until there is no possible rebound. The primary residence is <a href="https://www.nahb.org/blog/2021/02/homeownership-remains-primary-driver-of-household-wealth/">the largest financial asset</a> among the majority of home-owning households, so what happens when these families lose their homes? The study postulates that pre-existing inequalities in these communities are only further widened, reflecting the long-term, big-picture damage that extreme weather events can have in affected areas. 



 Conclusion 

 The insurance industry is <a href="https://heinonline.org/HOL/LandingPage?handle=hein.journals/davlr54&div=17&id=&page=">increasingly reluctant</a> to take on homes that are at high risk for wildfire, flood, or earthquake, leaving an alarming amount of households without a natural catastrophe safety net. Don’t let that be you! If you are looking to buy a house in a potentially impacted area, don’t hesitate to <a href="https://www2.unison.com/blog/climate_change/">think ahead</a> about the effects of climate change. Make sure you ask inspectors to look for evidence of previous flood or fire damage, and budget for future complications and damage. And don’t underestimate the effect of extreme heat, either–some homeowners in desert locales have <a href="https://www.wsj.com/articles/homes-designed-for-extreme-heat-4a60426a?mod=djemRealEstate_h">preemptively combatted future excessive summer temperatures</a> with features like solar panels and heat-reflecting roofs, for example. 

 The future may be nebulous, but the best defense is to be informed, knowledgeable, and prepared. 



 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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When we see natural disasters on the news, we see numbers–property damages, loss of life, displaced peoples. What are the long-term effects on home values and demographics, though? 

Climate Change & Home Values | Unison® Home Equity Sharing

by Mike Tubbs, Quantitative Portfolio Analyst, with Lauren Rosales-Shepard, Content Writer

 The U.S. inflation outlook continues to show strong signs of improvement! Headline inflation for December was -0.1%, bringing the annual rate down to 6.5%. It’s worth noting that this is the <a href="https://www.cnbc.com/2023/01/12/consumer-prices-fell-0point1percent-in-december-in-line-with-economists-expectations.html">largest month-over-month decrease</a> since April 2020 during peak-COVID. 
 

 Energy prices were the strongest contributing factor, with gas prices falling dramatically in the course of the month (as you yourself probably noticed firsthand). These dropped by a whopping 9.4%, and were additionally down 1.5% from a year ago. 


 Core inflation was 0.3% for the month, with shelter driving the majority of these changes. Still, this draws the annual core inflation number down to 5.7% from December 2022 to December 2021. Compared to where the economy was last December, the annualized inflation numbers are much lower and are showing strong signs of improvement. While annualized core inflation is still elevated, this marks a full quarter of core prices growing much more slowly than the aggressively high rates witnessed over the last year. 

 As we have continued to echo in our previous reports, there is more positive news on the horizon–in particular, because new rent contracts are yet to be fully integrated into current inflation statistics. Remember, the average American doesn’t renew their lease <a href="https://www.marketplace.org/2023/01/12/shelter-costs-rose-in-december-while-the-consumer-price-index-declined-why/">every single month</a>! The pace of shelter inflation is slowing dramatically in real-time data and this will begin to leak into the CPI report over the next three to six months. 

 Core inflation could also see a continued reduction. The Federal Reserve has orchestrated a significant reduction in core inflation over a three to six month window, all while adding an abundance of jobs. December posted a positive 223,000 new jobs, and the unemployment rate <a href="https://www.cnn.com/2023/01/12/economy/cpi-inflation-report-december/index.html">fell to 3.5%</a> during this period. 


 The bottom line? A soft landing without a recession still remains the most likely scenario for the macroeconomy. 

The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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The U.S. inflation outlook continues to show strong signs of improvement. Headline inflation for December was -0.1%, bringing the annual rate down to 6.5%, this is the largest month-over-month decrease since April 2020 during peak-COVID.

CPI Update: Entering 2023 | Unison® Home Equity Sharing

By Lauren Rosales, Content Writer

 The COVID pandemic <a href="https://www.nytimes.com/2022/05/18/opinion/covid-omicron-pandemic.html">isn’t over</a>, but we have reached a point where we can look back at its onset and initial peak to evaluate its immediate impact on various aspects of life. It’s less facile to consider the long-term impact–we cannot be sure what is <a href="https://www.sfchronicle.com/health/article/People-are-getting-COVID-again-and-again-and-17308776.php">“the new normal”</a> and what is still in a state of flux. In a trilogy of blog posts under the umbrella subjects of COVID and homeownership, we’ll examine three relevant sub-topics. Though we may be unable to state with absolute certainty whether some pandemic trends are here to stay, we can nevertheless reflect on what they are and where they’ve taken us thus far. 


 It’s unlikely that anyone in either school or the workforce will ever forget the abrupt shutdowns of March, 2020. Schools and offices closed; bars, restaurants, and retail shops all locked their doors. Many were faced with a new necessity: working from home. In May 2020, <a href="https://www.dallasfed.org/-/media/documents/research/papers/2020/wp2017.pdf">71.7%</a> of those who could work from home, did. Unsurprisingly, the sudden shift led to an <a href="https://scholar.google.com/scholar?q=Unplugging%20or%20staying%20connected%20Examining%20the%20nature,%20antecedents,%20and%20consequences%20of%20profiles%20of%20daily%20recovery%20experiences">increased difficulty</a> maintaining a work-life balance; parents had to juggle working from home and childcare; those who live alone found themselves feeling <a href="https://www.bmj.com/content/369/bmj.m1510">isolated and even lonely</a>. In other words, the socio-psychological impact was swift and severe. 

 Though overwork–or, more colloquially, “the grind”–has long been <a href="https://preprints.apsanet.org/engage/api-gateway/apsa/assets/orp/resource/item/61f943b78d70c3993c1514b6/original/the-culture-of-overwork-in-the-discipline-of-political-science.pdf">romanticized</a>, workaholism can have <a href="https://link.springer.com/article/10.1007/s10902-018-0008-x">devastating effects</a>, particularly on one’s mental health. A healthy work-life balance is also linked to <a href="https://www.nber.org/system/files/chapters/c0441/c0441.pdf">better management quality</a>, <a href="https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.592.9818&rep=rep1&type=pdf">increased productivity</a>, and higher rates of <a href="https://upcommons.upc.edu/bitstream/handle/2117/360382/Mas%20Berbegal%20%26%20Alegre%20FINAL%20UPC%20Commons.pdf?sequence=1">job satisfaction</a>. But when you go to work in the same space where you relax–or, depending on the size and nature of your living space, even sleep!--the boundary between the private and the professional inevitably blurs. You might start to feel like you’re simply always working. Significantly, this denies your brain the opportunity to detach from the work mindset and <a href="https://journals.aom.org/doi/abs/10.5465/AMBPP.2021.14748abstract">wind down, or recover</a>, from the stresses of the workplace. On the flip side, of course, some find it <a href="https://www.vox.com/the-highlight/21317485/work-from-home-coronavirus-covid-19-zoom-distraction-animal-crossing">difficult to focus</a> on work at home, and so while they seem to spend more hours working, they are <a href="https://bfi.uchicago.edu/wp-content/uploads/2021/05/BFI_WP_2021-56.pdf">actually getting less done</a>. 

 Ultimately, there has not been one single mass experience of working from home during the pandemic. And it bears acknowledging that <a href="https://www.epi.org/blog/black-and-hispanic-workers-are-much-less-likely-to-be-able-to-work-from-home/">not everybody was able</a> to work from home during peak COVID–<a href="https://www.bls.gov/news.release/flex2.t01.htm">fewer than 30%</a> of workers, in fact. While some <a href="https://www.vox.com/the-highlight/2020/5/19/21221008/how-to-bake-bread-pandemic-yeast-flour-baking-ken-forkish-claire-saffitz">embraced sourdough</a> starters and <a href="https://www.vox.com/culture/2020/3/27/21194698/animal-crossing-new-horizons-review-nintendo-switch">Animal Crossing</a>, others <a href="https://www.nytimes.com/2022/05/14/us/covid-one-million-deaths.html">lost family members</a> or are still <a href="https://www.science.org/content/article/what-causes-long-covid-three-leading-theories">suffering long-term effects</a>from the disease itself. Some have been <a href="https://www.huffpost.com/entry/return-to-office-work_l_60818168e4b01e14f06eb30a">itching to return</a> to the office, yet others have enjoyed a respite from <a href="https://www.nytimes.com/2022/03/10/business/remote-work-office-life.html">toxic office culture</a>. Experts don’t seem to agree whether working from home is either ‘good’ or ‘bad’--ostensibly, because every individual’s experience is so different. Whether a single person is more productive at home or in an office depends entirely on their own work proclivities and a myriad of outside factors. That said, one thing that multiple studies do show is that workers do tend to operate <a href="https://onlinelibrary.wiley.com/doi/10.1002/hfm.20666">most optimally</a> when they have some <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/pa.2709#pa2709-bib-0014">level of autonomy</a>. In other words, workers prefer to have the <a href="https://journals.sagepub.com/doi/pdf/10.1177/0021886318764353">freedom of choice</a>–at least to some degree. The <a href="https://www.econstor.eu/handle/10419/251067">burgeoning hybrid work culture</a> seems to best suit this penchant. 


 While so much of the dialogue surrounding the work from home revolution has focused on what the experience is like for the employee and the employer, studies are increasingly examining how it affects the bigger picture. For example, how would urban areas change if a majority of companies continued to allow their employees to work from home? With the commute made obsolete, those workers would likely feel freer to move to <a href="https://mattdelventhal.com/publication/how_cities_change_wfh/DKP_WFH.pdf">the city’s periphery</a> where they can obtain more square footage; resultantly, real estate prices in the core of the city would drop, and those who do continue to drive into work would benefit from less traffic and therefore decreased time on the road. 

 Meanwhile, as more people work from home in exurban areas, the demand will increase for <a href="https://www.engadget.com/hitting-the-books-going-remote-matthew-e-kahn-uc-press-140025976.html">service workers</a> at coffee shops, lunch spots, and retail in those localities. Local businesses <a href="https://www.uschamber.com/co/good-company/launch-pad/work-from-home-affects-on-consumer-behaviors">will thrive</a>, as walkable neighborhood shopping districts become more appealing to those who spend increased time in their community. Downtown commercial real estate, however, <a href="https://www.economist.com/finance-and-economics/2021/06/03/what-a-work-from-home-revolution-means-for-commercial-property">could suffer</a>. With so many companies maintaining hybrid work schedules, there are fewer people in downtown areas on weekdays; this means that there are <a href="https://www.vox.com/recode/23205039/future-remote-work-experts-promotion-recession">fewer people</a> frequenting the restaurants and shops. 

 If you are wondering about the effects that the work from home revolution has had on actual homes, stay tuned for Part Two! The conclusion will discuss home office renovations, and make suggestions on how best to optimize your own personal work from home experience. 
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Over two years into the “COVID Era,” this trilogy of blog posts considers the effects of the pandemic on particular aspects of homeownership. Up first: the Work-From-Home 'Revolution': Part One

Work from Home ‘Revolution’: Part 1 | Unison® Equity Sharing

By Lauren Rosales, Content Writer

 In our previous post, we described many of the potential negative effects of working from home: isolation, loneliness, overwork, lack of a healthy work-life balance. One way that the remote worker can combat the latter of these issues is to create a home office–or, if space prohibits, at least a dedicated workspace. When you have a separate space in which to work, you are empowered to <a href="https://thecamdenchronicle.com/importance-of-home-office-space">rid yourself of distractions</a> and provide your mind with a <a href="http://www.generationy.com/home-office-space/">much-needed distinction</a> between professional and personal. Homeowners who were suddenly required to work from home in 2020 felt the wisdom and necessity of this rationale–one Colorado-based company specializing in customizable backyard shed spaces saw their business <a href="https://www.nytimes.com/2020/08/14/realestate/coronavirus-home-improvement.html">increase by a whopping 500%</a> in May 2020, with many sales specifically for separate home offices. Renovations within the home were also wildly popular in mid-2020; the renovation site Houzz reported <a href="https://www.houzz.com/press/756/Houzz-Reports-Nearly-60-Percent-Increase-in-Demand-for-Home-Professionals">a 58% increase</a> in homeowner requests from June 2019. 



 What makes a good home office, though? It’s more than just a separate space for Zoom calls. If you can, you should try to choose a space that has windows and a good level of <a href="https://www.sciencedirect.com/science/article/pii/S0360132320305618?casa_token=KDXUJdG_CdYAAAAA:_uPBjvjnlHQzDhz2PFIZF7nKOifgmPXcIKhwn3Wx5oAlDKqktSVjzYhe5UETzhGDpIXkg_4yiQ">natural light</a>, as it will keep your mood buoyant, and thus your productivity as well. In a similar vein, studies have shown that <a href="https://journals.sagepub.com/doi/abs/10.1177/0018720820984286">incorporating nature</a> into your office can promote well-being–seriously, <a href="https://www.sciencedirect.com/science/article/pii/S0895398817301368">even looking at a single plant</a> in your workspace will lower your blood pressure (i.e. your levels of stress and anxiety). When you consider featured colors, you should stick with <a href="https://www.forbes.com/sites/theyec/2020/05/26/tips-for-designing-the-perfect-home-office">natural, earthy tones</a> for the same reason! 

 HGTV recommends using <a href="https://www.hgtv.com/design/rooms/other-rooms/10-tips-for-designing-your-home-office">vertical and horizontal organization</a>, whether floating shelves, cube storage (vs traditional bookcases), or keeping a desk drawer reserved for imminently-needed ‘to-do’ papers; the rationale of this guidance is to keep the top of one’s desk as uncluttered and functional as possible. And don’t forget the importance of your desk chair! If you’re going to be spending entire workdays sitting there, you’ll want the chair to be <a href="https://www.businessinsider.com/sc/how-to-make-your-home-office-efficient-2020-2">highly ergonomic</a>, not to mention the desk. You might want to look into the ability to adjust the desk height into a standing desk, if the varying positions suit your body best. Last but not least, remember that scent can play a significant role in an environment as well as <a href="https://www.marthastewart.com/8032892/how-create-calm-productive-home-office-aromatherapy">influence one’s mood</a>. Scents like citrus and eucalyptus improve focus, whereas lavender can help you maintain your zen during an agonizing day of back-to-back Zoom meetings.

 Though you can certainly create an entirely detached space for your home office, like those ordering made-to-order sheds above, you may also be able to efficiently repurpose a room in your home that simply isn’t living up to its full potential yet. <a href="https://www.wsj.com/articles/renovated-house-perfect-working-from-home-11651255647">This savvy renovator</a> and her family redesigned their entire home with the single goal of making it more user-friendly to two adults working from home and two children in remote school. Perhaps the most difficult part of the renovation odyssey, she writes, was the “unflinching” honesty required, the self-awareness of how each of them worked in order to best serve those needs. In other words, before the dining room could be converted into an effective workspace, they had to acknowledge that they almost never use it for dining. Only then could they ditch the impractical buffet and install floor-to-ceiling wardrobes that would be the most apt storage solution for homeschool supplies. Be purposeful–you won’t want to use a high-traffic area full of noise and distractions, for example. Just because a desk would fit there, doesn’t make it a spot prime for working from home.

 

 If you are a remote or hybrid worker and struggle to make your current home office work for you, you may desire to take a cue from the many others who have renovated to improve their experiences. While renovations can be inconvenient or pricey, the long-term benefits are often immeasurable. A <a href="https://www.unison.com/">Unison</a> equity sharing agreement is one option to help you raise the funds for a home office makeover or addition–and it’s an option that requires zero monthly payments, takes zero interest, and leads to zero debt! <a href="https://www.unison.com/home-renovation">Renovations</a> are one of the most popular uses of a Unison agreement, in which qualifying homeowners can receive up to 17.5% of their home’s value in cash in exchange for a percentage of the home’s future change in value at the time of sale. If your renovations <a href="https://www.unison.com/blog/renovate_house">add value</a> to the home, you can apply for an adjustment that would subtract that value from the accrued investment at the end of the agreement. Curious? It takes seconds to <a href="https://www.unison.com/">see whether your address qualifies</a>, and will have absolutely no effect on your credit score. You can also check out the <a href="https://www.unison.com/home-renovation/">renovation calculator</a>, which will help you put numbers to your ideas! 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Over two years into the “COVID Era,” this trilogy of blog posts considers the effects of the pandemic on particular aspects of homeownership. Up next: the Work-From-Home Revolution, Part Two!

Work from Home ‘Revolution’ Part 2 | Unison® Equity Sharing

by Mike Tubbs, Quantitative Portfolio Analyst, with Lauren Rosales-Shepard, Content Writer

 The Bureau of Labor Statistics announced in their <a href="https://www.bls.gov/news.release/pdf/cpi.pdf">November report</a> that the Consumer Price Index (CPI) rose 0.1% (7.1% annual change). This is one of the most optimistic updates of the year, and a significant shift downwards from October’s high of 0.4%. Core inflation was 0.2% for the month, which is happily down from 0.3% in October. 

 Core goods prices have fallen quite rapidly and were actually negative contributors this month, while core services continue their downward trend. This has been most evident in used-car prices which have recently rapidly fallen. 

 Though shelter costs remain a strong contributor to the current inflationary environment, it’s important to remember that these indices are quite backward-looking. Most leases are on an annual basis and so there is a noteworthy lag from six to twelve months in the CPI calculations. Former CEA Chairman Jason Furman substituted new leases <a href="https://twitter.com/jasonfurman/status/1602665320342167553?s=20&t=ooqcl2MnhhCGnv2Ldh3M6A">into the calculator</a> and core CPI actually fell by a staggering -1.2%. 

 The key takeaway is that the Fed’s tightening cycle has drastically affected all the prices in the CPI even if they haven’t materialized in the current rent estimates. This is a slightly optimistic review; taken correctly, with the recent <a href="https://www.cnbc.com/2022/12/14/fed-rate-decision-december-2022.html">50bps rate hike</a>, the Fed may be close to the terminal rate and feel that they have adequately addressed inflationary concerns. The pace of rate hikes can be expected to slow over the next few FOMC meetings. In that case, we expect inflation to moderate and a soft landing as mortgage rates have peaked, and new leases enter the existing CPI calculations. 

The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Stay up to date on the Consumer Price Index (CPI) with this series of monthly updates from Unison's Quantitative Portfolio Analyst.

CPI Update: December 2022 | Unison® Home Equity Sharing

By Lauren Rosales, Content Writer

 The pandemic heralded forth with a series of contiguous stay-at-home orders in many places. Even in those cities and towns where such orders were never officially issued, few businesses remained open to beckon people from their homes in any case. With so much time newly spent at home, speculations tittered forth half-jokingly regarding a potential <a href="https://www.usatoday.com/story/life/parenting/2020/04/02/coronavirus-fact-check-could-covid-19-cause-baby-boom/5105448002/">“COVID baby boom.”</a> However, now that we are over two years out from those initial enforced lockdown measures, the actual data tells a different story about the peak COVID months.



 Here’s the thing: uncertainties of every kind aren’t exactly great for conception rates. With loss of (or decreased) income, fewer folks feel comfortable starting–or growing–a family. Add a public health crisis and its resultant school and daycare closures, not to mention the desire to steer clear from crowded hospitals? In June 2020, taking all of these issues into account, the Brookings Institute estimated that 2021 would see <a href="https://www.brookings.edu/research/half-a-million-fewer-children-the-coming-covid-baby-bust/">300,000-500,00 fewer</a> births.

 The Brookings Institute, it turns out, was onto something. According to the Guttmacher Institute, <a href="https://www.guttmacher.org/report/early-impacts-covid-19-pandemic-findings-2020-guttmacher-survey-reproductive-health">34% of American women</a> either put their plans for having children on hold, or reduced the number of children they were planning to have altogether, due to the pandemic. Moreover, those who were already undergoing fertility treatments were <a href="https://www.abdn.ac.uk/news/14623/">forced to pause</a> as clinics closed; the resultant backlog led to delays from 6 months up to an entire year. The birth rate, <a href="https://www.wilsoncenter.org/event/baby-bust-impact-covid-19-declining-fertility-rates">already declining</a> before the pandemic, waned further. Ultimately, there were about <a href="https://www.wsj.com/articles/covid-19-pandemic-led-to-smaller-than-expected-baby-bust-new-data-suggest-11644328800">7,000 fewer births</a> in the United States in the first nine months of 2021. One notable exception to the dwindling rate occurred in New England–particularly New Hampshire, which saw <a href="https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/06/07/one-region-led-a-13-state-pandemic-baby-boomlet">a 17% increase</a> in births in 2021. 

 However, the labor market recovered <a href="https://www.philadelphiafed.org/the-economy/macroeconomics/labor-market-recovery-during-the-covid-19-pandemic">much more quickly</a> than had been anticipated based on historical precedents. In addition to which, the government’s multiple <a href="https://www.pgpf.org/blog/2021/03/what-to-know-about-all-three-rounds-of-coronavirus-stimulus-checks">stimulus payments</a> to families and individuals enabled many to stay better afloat in the precarious time. So while births dropped at the beginning of 2021, they <a href="https://www.npr.org/2022/07/19/1112259628/us-birth-rate-increase-replacement">increased by 4%</a> in the second half of the year. In fact, the birth rate rose for the <a href="https://www.thebump.com/news/us-birth-rate-increase">first time since 2014</a>! This upward trend is <a href="https://www.businessinsider.com/the-millennial-baby-boom-probably-isnt-going-to-happen-2021-12">not expected to last</a>, however; rather than a “baby boom” of any kind, many are calling it a “blip.”

 

 COVID aside, there are many factors that are contributing to the declining birth rate. As women have increasingly undertaken advanced education beyond high school and planned career trajectories, they are <a href="https://www.nytimes.com/2021/06/16/us/declining-birthrate-motherhood.html">less likely</a> to start a family in their early to mid-twenties. Moreover, improved access to free birth control has <a href="https://anderson-review.ucla.edu/free-birth-control-fewer-births/">sharply decreased</a> the number of unintended pregnancies, particularly in would-be single mothers. 



 Yet even as it seems that a great many households do not wish to increase their size with additional (or potentially any) children, another trend suggests that they are growing their numbers in a different manner. An analysis of census data from 1971-2021 shows that the amount of people living in multigenerational households <a href="https://www.pewresearch.org/social-trends/2022/03/24/financial-issues-top-the-list-of-reasons-u-s-adults-live-in-multigenerational-homes">quadrupled</a> in those three decades. 

 Part of the logic behind this shift points to growing racial and ethnic diversity in the United States; multigenerational living arrangements are <a href="https://www.pewresearch.org/fact-tank/2018/04/05/a-record-64-million-americans-live-in-multigenerational-households/#:~:text=Growing%20racial%20and%20ethnic%20diversity,live%20in%20multigenerational%20family%20households.">much more common</a> in Asian and Hispanic cultures, both of which are currently the fastest growing demographics in the country. But as millennials grapple with historic levels of student debt and through-the-roof housing costs, they are returning home to live with their parents in <a href="https://www.pewresearch.org/fact-tank/2022/07/20/young-adults-in-u-s-are-much-more-likely-than-50-years-ago-to-be-living-in-a-multigenerational-household/">higher numbers</a> than previous generations. A quarter of adults aged 25-34 in the United States lived in a multigenerational household last year. In addition, consider the <a href="https://www.marketplace.org/2022/03/25/almost-one-in-five-americans-now-live-in-a-multigenerational-household/">simultaneous childcare and eldercare crises</a>; as the price of both daycare and assisted living facilities skyrocket, having a grandparent at home can be a financial boon. 



 During COVID, some of these pre-existing issues were exacerbated. For example, with daycares closing frequently due to exposure of pupils or instructors, working parents were frequently at a loss as to how to handle childcare. And the isolation within nursing homes or assisted living facilities took an enormous toll on seniors’ mental health. A grandparent living at home with their adult children would be much less likely to suffer from loneliness, and in addition <a href="https://www.prnewswire.com/news-releases/new-study-reveals-multigenerational-living-nearly-quadrupled-in-the-past-decade-with-the-pandemic-playing-a-strong-role-301258787.html">could provide the much-needed childcare</a> for parents attempting to work. 



 There’s no question that our understanding of a “typical American household” has shifted over time. The pandemic might be responsible for a portion of these changes, but many of these modifications have been in the making for decades. If you are growing the members of your household–whether they be babies, adult children or elders–you may be interested in renovations to accommodate your new living arrangements. As you consider a myriad of methods to finance this venture, remember that a <a href="http://unison.com">Unison equity sharing agreement</a> may be the perfect fit for your situation. Unison can help you tap into your home equity for the funds you need to expand or alter your home, giving you cash now in return for a percentage of your home’s change in value when you sell it. Plus, if you work with licensed contractors and fully document the project, you may apply for a Remodeling Adjustment, which if granted would result in Unison subtracting any added value from its eventual share. Sounds good? <a href="https://www.unison.com/home-renovation/">Learn more</a> about using an equity sharing agreement to renovate your home today!


 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

pexels-sergey-makashin-5444952

Over two years into the “COVID Era,” this trilogy of blog posts considers the effects of the pandemic on particular aspects of homeownership. Now featured: the baby blip, and rise of the multigenerational household.

COVID Baby Boom & Multigenerational Households | Unison.com

By Lauren Rosales, Content Writer

 Raise your hand if you have a cheap membership to Planet Fitness that you haven’t used in ages, but that you keep forgetting to cancel? It’s a hassle to go to the physical location, and so your subconscious continuously pushes it out of your mind. Each month you see the charge on your credit card bill, an innocuous but persistent $10.00. How did this happen?


 In March 2020, when the entire country seemingly shut down, gyms and fitness centers were at the forefront. Nothing says “contaminant” like a sweaty, shared elliptical or bench press–and in a poorly ventilated room, crowded with straining bodies, all panting vigorously, no less. Fitness classes were axed indefinitely, or at least, for the foreseeable future.
 

 Moreover, with enforced social distancing measures and urges to stay at home, regular incidental exercise (read: step counts) steeply declined. If you used to walk a quarter mile to your car before and after work, for example, you would lose that half mile of brisk walking every day when forced to work from home. Even strolling down the aisles of Target was light movement lost, as stores switched to pick-up and delivery services that kept you safely snug and stationary in your car or house. Indeed, smartphone-based apps indicated that within 30 days of lockdown, there was a <a href="https://doi.org/10.7326/M20-2665">global 27.3% decrease</a> in daily step counts.

 The results? Spoiler alert: as a people, we did not become movement-free amorphous beings (imagine the spacebound humans in Pixar’s WALL-E). People embraced <a href="https://www.nps.gov/yell/learn/news/20046.htm">hiking</a> and other solo or small group outdoor recreation, but perhaps the most marked result was the sudden rise of the home workout. Exercise classes migrated from the studio to <a href="https://link.springer.com/article/10.1007/s11332-021-00747-6">social media and communication platforms</a> like Zoom. From March to October 2020, health and fitness equipment revenue <a href="https://www.washingtonpost.com/road-to-recovery/2021/01/07/home-fitness-boom/">more than doubled</a> with sales of treadmills spiking 135% and those of stationary bikes actually tripling. Home workout equipment and subscription service mogul Peloton quadrupled its value to <a href="https://www.nytimes.com/2021/01/17/business/peloton-slow-delivery.html">more than $40 billion</a>. Many turned to <a href="https://www.sciencedirect.com/science/article/pii/S1469029221000960">online workouts or fitness apps</a> in order to stay active, the latter seeing a <a href="https://www.visualcapitalist.com/the-growth-of-home-fitness-apps-2020/">50% increase</a> in users between the first and second quarters of 2020.

 

 Unsurprisingly, people began to <a href="https://repositorio.iscte-iul.pt/handle/10071/24161">cancel their gym memberships in droves</a>. Two chains, 24 Hour Fitness and Gold’s Gym, sought <a href="https://www.nytimes.com/2021/10/19/business/fitness-industry-remote.html">protection from creditors</a>. Some gyms, like Planet Fitness, put membership fees on hold until gyms could safely reopen. But with a treadmill in the basement or a Peloton nestled into a niche of one’s home office, why return at all? If you forgot to cancel when the fees were put on hold, you might easily have continued to forget once they were reinstated–hence the situation outlined in the introduction to this blog post!



 Now that the vaccine is widely available and federal mandates have long expired, gyms have had ample time to reopen and test the waters, so to speak. And it turns out that not everyone is coming back. The Sports and Fitness Industry Association has found that Americans have largely eschewed the same activities that took them to fitness studios prior to the pandemic (think stationary cycling and cross-training); the fact that <a href="https://www.washingtonpost.com/business/2022/09/24/is-the-pandemic-over/">one in five clubs</a> shut down during that time has also not helped. Planet Fitness, clearly attuned to this change, recently partnered with the interactive fitness platform iFit to develop <a href="https://www.bloomberg.com/news/articles/2021-01-19/fitness-industry-may-never-return-to-its-old-ways-after-covid-19">workout content for a subscription plan</a> that does not require membership to a physical gym. The convenience and flexibility of at-home workouts are irresistible, though some continue to crave the social interaction of the locker room or the catharsis of the group sweat in a studio. But with exercise, the modern participant can have it all by embracing the <a href="https://www.wsj.com/articles/are-gyms-dead-why-home-workouts-are-here-to-stay-11611337770?mod=article_inline">increasingly popular hybrid model</a> in which they continue to work out at home but also pop into the gym–albeit occasionally. 


 
 If you appreciate the ability to sneak snatches of exercise into your everyday routine without the inconvenience of leaving the house, but are frustrated by the thrown-together vibes of your current home workout situation, there are ways you can purposefully improve it. Unless you really, truly love exercise, chances are that you sometimes feel like it is a bit of a chore. One way to work against this gloomy proclivity is to make your workout space into a place <a href="https://health.clevelandclinic.org/how-to-create-a-home-gym-youll-actually-use/">where you want to spend time</a>–or, at least, don’t dread it! So many home gym areas are relegated to dreary basements with little to no natural light, spiderwebs in every corner, and uninspiring concrete walls. If this is the case for you, how about brightening the space with a cheerful paint job, some shelves for spacial variety (and storage), or gym-mimicking mirrors? If you add a TV, you could also reap the benefits of streaming online classes on a bigger screen than that of your wee smartphone–or even throw on a binge-worthy TV show to coax you through longer sessions of cardio!


 
Part of making a space inviting is inevitably about keeping it tidy. While cabinetry would be a fab addition to a home gym space, even grouped baskets on the floor are helpful for keeping items like foam rollers, boxing gloves, resistance bands, jump ropes, yoga blocks, or hand weights <a href="https://www.nytimes.com/2022/01/04/realestate/build-a-home-gym.html">orderly and uncluttered</a>. A chair or a bench is a nice place not only to rest, but to toss a towel so that it doesn’t end up on the floor.


 
When it comes to stocking a home gym, you will obviously need to consider space and budget. Try not to feel compelled to buy all of the equipment at once. If you have the space for a treadmill or elliptical but not the cash, or the cash but not the space, you can still <a href="https://www.shape.com/fitness/workouts/how-build-perfect-home-gym">jump rope</a> vigorously for a solid cardio workout. Rather than immediately investing in a complicated weights machine, you might try using hand weights on a yoga mat, or doing Pilates with wrist or ankle weights. In fact, there are a cornucopia of exercises you can do purely by leveraging <a href="https://www.shape.com/fitness/workouts/bodyweight-training/best-bodyweight-exercises">your own bodyweight</a>! 


 
Whether you are a Peloton devotee or simply rolling out a yoga mat in your office for 15 minutes of Pilates during your lunch break, it’s immensely helpful to <a href="https://www.everydayhealth.com/fitness/9-simple-tricks-help-you-start-working-out-actually-stick-it/">have a routine</a>. If you have embraced the hybrid workout and vary your exercise between gym/studio and your own home, try to keep the variety consistent so that you don’t create excuses not to do any at all! 



 
There are <a href="https://www.better.org.uk/content_pages/top-gym-excuses#:~:text=A%20new%20survey%20by%20Better,has%20on%20their%20mental%20health.">many reasons</a> why you might detest going to the gym–there’s a reason that home gyms are <a href="https://candysdirt.com/2022/03/06/home-gyms-rank-second-for-todays-homebuyers/">considered a huge perk</a> by contemporary homebuyers! If you’re determined to take extra space in your home to create the perfect workout alternative, you might consider a <a href="http://unison.com">Unison equity sharing agreement</a> to help you to fund an extensive renovation. Unison can help you tap into your home equity for the funds you need to expand or alter your home, giving you cash now in return for a percentage of your home’s change in value when you sell it. Plus, if you work with licensed contractors and fully document the project, you may apply for a Remodeling Adjustment, which if granted would result in Unison subtracting any added value from its eventual share. Sounds good? <a href="https://www.unison.com/home-renovation/">Learn more</a> about using an equity sharing agreement to renovate your home today!


 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

pexels-cottonbro-4056510

Over two years into the “COVID Era,” this trilogy of blog posts considers the effects of the pandemic on particular aspects of homeownership. Now featured: the rise of the home gym. 

COVID and the Rise of the At-Home Workout | Unison.com

By Lauren Rosales-Shepard, Content Writer

 Not for the first time, your jaw drops when you open the energy bill. You resemble a shocked cartoon character straight out of the Looney Tunes, but there’s nothing comical about the numbers on that sheet of paper in your hands. Your eyes find the perpetual offer to “go paperless” as part of the company’s new sustainability efforts. “I should really remember to do that,” you say to yourself absently, still in disbelief over the amount owed.



 Then your brain wanders down a rabbit hole. “Sustainability… going green.” It comes to you in a moment of inspiration– “Solar panels!” 
 
You vaguely remember hearing that solar panels can save you money on your energy bills. And in addition to that, you vaguely remember something about tax incentives, the “Green New Deal”... what was it again?

 This scene isn’t just playing out in your own living room, believe me. Skyrocketing energy costs are frustrating–and flabbergasting–households <a href="https://www.bloomberg.com/news/articles/2023-02-10/why-energy-bills-are-so-high-right-now-around-the-world#xj4y7vzkg">all across the globe</a>. From electric bills to <a href="https://www.cnn.com/2023/01/27/business/gas-prices-increase-inflation/index.html">gas prices</a>, consumers are increasingly interested in alternative options. And, increasingly, alternative options are getting greener in response to imminent environmental concerns. Whether you’re most interested in saving money or reducing your carbon footprint, there are many green improvements you can make to your lifestyle that will accomplish both. While some changes are <a href="https://unison.com/blog/green_home improvements">smaller DIY projects</a> you can do on your own, there are much larger steps you can take. The good news is that, in recent years, the United States government has put some incentives in place for such improvements. Read on to learn more about these opportunities.

 

 The <a href="https://www.whitehouse.gov/cleanenergy">Inflation Reduction Act of 2022</a> (not the Green New Deal) established support for a variety of green initiatives:



 <ul>
 <li>Solar Energy: Solar PV systems installed between 2022-2032 are eligible for a 30% tax credit.</li>
 <li>Insulation and Air Sealing: You could get tax credits or rebates for improvements that keep the outside air from seeping into your home, and indoor air from leaking out. This could include things like caulking and weather stripping, upgraded doors and windows, and even home energy audits by an inspector who will identify your best improvement options. </li>
 <li>Electric Heat Pump Appliances: If your home is eligible, you could receive a rebate of up to 100% of the cost of purchasing and installing an electric heat pump clothes dryer and water heater.</li>
 <li>Electric Stove or Oven: You could potentially be eligible for rebates that can cover up to 100% of the costs of electric stoves, cooktops, ranges, and ovens (as opposed to gas).</li>
 <li>Electric Vehicle: If you purchase a new electric car, you can qualify for up to $7,500 in tax credits; a used electric vehicle is eligible for up to $4,000 in tax credits.</li>
 <li>Breaker Box: In order to upgrade your home’s breaker box or electrical wiring to accommodate the increase in electric appliances, you may qualify for additional tax credits and rebates. </li></ul>

 
 If you’re interested in <a href="https://www.forbes.com/uk/advisor/energy/how-solar-power-can-cut-your-bills-and-your-carbon-footprint/">saving money</a> and want to pursue the solar energy option, you can learn more on the <a href="https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics">government website</a>. There is a <a href="https://www.energystar.gov/about/federal_tax_credits">similar site</a> to answer questions you may have about other energy-efficient upgrades. Not sure what your most effective course of action might be? Consider obtaining a <a href="https://www.energy.gov/energysaver/home-energy-assessments">home energy assessment</a>, whether it is professional or guided do-it-yourself. Bear in mind that income and other limits may apply for some of these initiatives, so it is always best to run your ideas and plans by your tax or other financial advisor to positively verify and determine your eligibility. 


 
Energy costs are only likely to rise in the future. If you’re frustrated now, it’s time to start thinking about the measures you can take to save money! Not only your pocketbook, but the planet, too, will thank you. 


 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

vivint-solar-9CalgkSRZb8-unsplash

Did you know that there are tax credits and rebates to make green improvements to your home or purchase an electric car? Learn more about how to make your home and lifestyle more sustainable–and save money while doing it.

Tax Incentives for Green Home Improvements in 2023| Unison® Home Equity Sharing

By Lauren Rosales-Shepard, Content Writer

 The home remains the largest asset for most of us, and is one of the most straightforward ways to <a href="https://newsletter.businessinsider.com/click/31071759.438731/aHR0cHM6Ly93d3cuYnVzaW5lc3NpbnNpZGVyLmNvbS9ib29tZXJzLWJ1eWluZy1ob21lcy1ibG9ja2luZy1taWxsZW5uaWFscy1ob3VzaW5nLW1hcmtldC1yZWFsLWVzdGF0ZS1wcmljZXMtMjAyMy00P3V0bV9tZWRpdW09bmV3c2xldHRlcg/601973a1297c720cfa4b0826Bbca8d9a5">grow wealth</a>. But it can be difficult to realize that wealth and turn it into a liquid asset you can actually use! If you have to sell your home to come into the money, does it even count? It’s hardly surprising that homeowners are sitting on a <a href="https://themortgagereports.com/96952/record-high-home-equity-2022">record amount of equity</a>–what else can they do with it?


 One of the most popular answers to this question is to tap into that equity with a loan of some kind. You’ve probably heard about them in passing–home equity loans, refinancing, reverse mortgage, HELOC. HELOCs in particular are frequently in the news, with journalists trumpeting whether <a href="https://finance.yahoo.com/news/latest-heloc-news-rates-hold-194038536.html">rates are up</a> or <a href="https://www.marketwatch.com/picks/heloc-rates-have-dipped-should-you-take-one-out-9ae7c609">rates are down</a>. Let’s dig a bit deeper and consider the HELOC from multiple angles. 

 
“HELOC” is an acronym for a “Home Equity Line Of Credit.” Think of it like a credit card: the bank converts your equity into a line of credit, against which you can borrow whenever you’d like. Usually, there’s an “initial draw period” of <a href="https://www.unison.com/blog/how-does-a-heloc-work/">five to ten years</a>, after which you would likely have 20 years to steadily repay what you borrowed–plus interest. You only pay interest on the funds that you actually use, not the lump sum that is technically available. So, in theory, if you never used your HELOC, you would never need to pay the interest; after all, what’s the interest rate on zero? 

 Because you technically only pay the interest on any money you actually use, many people consider taking out a HELOC purely <a href="https://womenwhomoney.com/heloc-emergency-fund/">to have on hand</a> ‘just in case.’ If you never need it, you need never worry about paying interest ‘back.’ Plus, you have it right there waiting to be used, as immediately as necessary. However, be aware that taking out a HELOC isn’t actually free. Closing costs can total <a href="https://www.cbsnews.com/news/how-much-are-heloc-home-equity-loan-closiang-costs/">between 2-5%</a> of the amount made available to you, and cover fees for origination, filing, appraisal(s), credit report(s), title, and document preparation. So even if you never dip into the HELOC itself, you will still have to pay these fees.

 

 It’s important to remember that when you open a HELOC, you are using your home as the collateral. This means that if you aren’t able to keep up with payments, whether the initial interest payments during the draw period or the later repayments, you could be in danger of losing your home to foreclosure. It’s also important to note that a HELOC is a lien on your property. If you don’t remember to actively close the account with the lender after they’ve been repaid, even if a great many years have passed without further activity, you will find that the lien on your home remains. Or if you took out the HELOC to act as your emergency fund but never needed it, and then forget that you ever had it, the lien is still there. That lien can cause <a href="https://www.federaltitle.com/3-reasons-helocs-create-title-headaches/">major headaches</a> by posing complications and delays if you want to sell your home. 



 Having a HELOC in your backpocket can be quite convenient–but perhaps too convenient. If you struggle with self-control when it comes to spending money, a HELOC might present you with too much temptation to resist. Although you certainly could use a HELOC to pay for a vacation, increase your spending capabilities at Christmas, or elevate your lifestyle, it <a href="https://www.investopedia.com/mortgage/heloc/reasons-not-to-use-heloc">isn’t a good idea</a>. If your regular income and habits don’t support those endeavors, how can you expect to eventually pay back the principal sum? Even if you don’t indulge in large purchases, those smaller impulse buys can really add up. It’s difficult to check the habit of spending–because consumer behavior often reflects <a href="https://link.springer.com/chapter/10.1007/978-3-030-83681-8_8">our desire to forge and present our identities</a>, it’s easy for us to indulge a bit too much in our inherent quest for self-definition and expression. During the COVID-19 pandemic, too, <a href="https://link.springer.com/article/10.1186/s43093-022-00174-0">online shopping became an outlet</a> for many, whether it was in an effort to improve mental health or to simply get outside the house!. We may be able to leave our homes now, but we <a href="https://www.businessinsider.com/how-pandemic-changed-brick-and-mortar-retail-stores-fulfillment-returns-2022-12__">still often shop</a> from our computers and phones. 


 
 Another key factor regarding HELOCS: they tend to have variable, rather than fixed, interest rates. It can therefore be impossible to know exactly how much you will owe over time, which is a pretty sizable obstacle to any long-term financial planning. <a href="https://michellejaqua.medium.com/why-i-cant-refinance-my-heloc-loan-e29bcf2d05f2">One blogger</a> became so frustrated with the nebulous, ever-changing status of her HELOC that she altered the acronym’s meaning to “Having Evidently Little Outside Control.” If you don’t have a trustworthy bank, like <a href="https://www.apartmenttherapy.com/heloc-fixer-upper-36737331">this homeowner</a> who had taken out a HELOC to pay for extensive home renovations, you may also run into Big Problems. After using the entire line of credit, she describes how “We couldn’t seem to get a straight answer from the lender on how much we’d need to pay per month in order to pay it off in X number of years.” <a href="http://www.thegirlintheband.com/home/heloc-horror-story">Another homeowner</a> struggled with intense sticker shock when her lender informed her that she should expect a bigger monthly payment when she started to pay down the principal–but didn’t initially explain by how much. Bottom line: between unstable interest rates and dissembling, evasive lenders, it might not be possible to ever know just what you’re getting into with a HELOC. 


 
None of this is to say that a HELOC is always a bad idea! There is no doubt that the flexibility a HELOC offers might be well-suited for many, especially if they already have a bank or lender who they trust, and are confident in their ability to resist the temptation of impulse purchasing. And if the upfront costs don’t deter you, an emergency HELOC could end up saving the day in an unexpected crisis. However, if monthly payments and unpredictable interest rates are going to interfere with your ability to make long-term plans or live your life to its fullest potential, you might want to consider a different option. 


 
A <a href="https://unison.com">Unison</a> equity sharing agreement enables you to tap into your home equity without demanding that you make burdensome monthly payments, or worry about the instability of interest rates. Instead, you get up to 17.5% of your home’s current value in cash in exchange for a percentage of its future change in value when you decide to sell. Many partnering homeowners use their funds for renovations, saving for retirement, starting a small business, consolidating debt, or diversifying their financial portfolio–in other words, to live the life that they’ve always wanted. Curious? <a href="https://www.unison.com/how-it-works">Learn more</a> today. 
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

heloc blog

You’ve probably heard about HELOCs (home equity lines of credit). But is it a good option to help you dip into your home equity? Read up to learn more about HELOCs and their potential pitfalls. 

What Should I Know About HELOCs?

By Lauren Rosales-Shepard, Content Writer

 At <a href="https://unison.com">Unison</a>, we’ve long considered ourselves privileged to empower homeowners to achieve financial freedom and wellbeing by helping them tap into their home equity. We are now beyond thrilled to announce that we have had the recent honor of sharing our passion about helping homeowners on a global stage! Innovate Finance commissioned BBC StoryWorks to produce their “Wired Differently” series, which features Unison as one of the fintech companies who are doing groundbreaking work to help make finances more manageable and accessible for people across the world.


 The series debuted on April 17, 2023 at the 2023 Innovative Finance Global Summit, during which short films highlighting each fintech premiered, and representatives from the companies fielded questions on a panel. Our own VP of Marketing, Helene Ton Anderson, represented Unison on the panel and reported that there was keen interest in when Unison might be available to homeowners outside of the United States! 

 
We pioneered the equity sharing agreement as a single solution to two problems: on the one hand, homeowners who had built up equity in their homes couldn’t unlock it without taking on debt; additionally, investors struggled to obtain efficient, diversified access to the lucrative residential real estate asset class. In an equity sharing agreement, the homeowner is offered up to 17.5% of their home’s current value in cash, in exchange for a percentage of the house’s future change in value. There are no monthly payments, and no interest, which means that homeowners can build a solid financial foundation without piling on debt. Instead, they have the option of buying out their agreement either when they sell the home, or in 30 years. This arrangement opens up a slew of possibilities for homeowners: they can renovate their home, start a small business, rid themselves of debt, diversify their financial portfolios, or prepare responsibly for retirement. 

 The effects of enabling homeowners to reach and maintain financial wellness aren’t merely limited to those individual households–they bleed out into the wider community and economy. On the most basic level, less consumer debt means more purchasing power, and that increased purchasing power is favorable for growth on a much larger scale. But granting homeowners access to their equity without the exposure inherent in loan products also combats issues like the <a href="https://www.unison.com/blog/downsizing-vs-aging-in-place">senior housing shortage</a> by offering seniors a way to pay for needed renovations to age-in-place or otherwise subsidize their retirements. 

 

 For example, the short film about Unison spotlights Easan Katir, a homeowner who discovered Unison’s equity sharing agreements when he was researching ways to start financially preparing for retirement. He describes how he knew his family’s home had appreciated, but the traditional option didn’t appeal to him because they all demanded monthly payments and interest. With the funds released from the Unison Agreement, Katir declares, “We aren’t obsessing about money.” Instead, his family feels secure in the firmness of their financial foundation for the future. 



 In the same video, Theodor Haugen, Vice President of Customer Experience, celebrates Unison’s ability to witness homeowners accomplishing things “they just weren’t able to do before.” He further emphasizes, “We’re not talking about wealth locked up at the top here; we’re working with normal people, normal Americans.” As the <a href="https://www.ssa.gov/pressoffice/IncRetAge.html">retirement age rises</a> and an <a href="https://www.axios.com/2023/04/15/retirement-savings-enough-401k-roth-stocks">inability to prepare for it increases</a>, the average American is in need of more options. Unison is positioned to help.


 
BBC Storyworks was asked by Innovate Finance to produce the short films for each of the companies; watch the full video about Unison below: 



 
<iframe width="560" height="315" src="https://www.youtube.com/embed/KFP91bxMfQg" title="Unison" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

JF1WRaoA

On April 17, 2023, Innovative Finance launched their “Wired Differently” series, highlighting fintechs–Unison among them–who break the status quo in their endeavors to help people achieve a state of financial wellbeing. 

Unison Takes to the Global Stage at the Innovative Finance Global Summit | Unison

by Lauren Rosales-Shepard, Content Writer
 Technically, the “Accessory Dwelling Unit” (ADU) has been around <a href="https://thecoastnews.com/family-business-makes-backyard-homes-a-reality/">since the 1980s</a>, though the concept itself is much older. If the phrase doesn’t ring a bell, you might know it better as “granny house” or “backyard cottage”--not to mention, if above a garage, “carriage house,” or even a “mother-in-law suite.” Recently, there has also been an uptick in the label “backyard house.” As the name implies, an ADU is an additional, self-contained living space attached or adjacent to the primary house on a single family residential lot. In other words, it’s an extra place to live on a property, whether separate from the house as its own structure, or added onto the existing building. If you watch HouseHunters, you’ve probably seen couples who <a href="https://www.hgtv.com/shows/house-hunters/episodes/make-room-for-mama-in-boston">desire a separate space</a> for their mother or other aging parent to live, one with its own bathroom, kitchen, and relative privacy. That is the ADU. 

 Joe Gebbia, one of the co-founders of Airbnb, has branched out into a <a href="https://www.fastcompany.com/3062246/an-exclusive-look-at-airbnbs-first-foray-into-urban-planning">new startup</a> called Samara that, in search of new products that could create social change, has recently focused on backyard houses. The prefab houses are available in two different sizes, either a 430-square-foot studio, or a 550-square-foot one-bedroom, and Samara has ensured that they all <a href="https://www.fastcompany.com/90809611/inside-an-airbnb-cofounders-latest-venture-building-tiny-backyard-homes">generate more electricity</a> than they use with electric appliances and solar panels on the roof. In addition, the company handles the entire construction process, from surveying to obtaining permits, in hopes of diminishing obstacles and increasing demand. 

 <h2>How Can ADUs Benefit Society?</h2>

 Samara’s ADUs in particular are clearly aimed at sustainability. ADUs in general, however, are <a href="https://www.nar.realtor/magazine/real-estate-news/commentary/the-eco-friendly-adu-housing-s-game-changer">inherently sustainable</a>; building on existing properties (particularly in urban areas) adds to the housing supply while avoiding the creation of sprawl. Plus, the necessarily compact size of an ADU means that it takes fewer raw materials to build, which conserves resources and takes a much smaller carbon footprint to build. That said, the potential for sustainability is merely one of the benefits that ADUs in general present to American society. 


 First, let’s consider the simultaneous prioritization of single-family housing and soaring housing prices–both resulting in <a href="https://fortune.com/2023/06/06/housing-market-broken-zoning-affordability-millennials-building-tiny-homes-backyard/">a distinct lack</a> of what we used to call “starter homes.” Due to zoning restrictions, it’s <a href="https://www.nytimes.com/interactive/2019/06/18/upshot/cities-across-america-question-single-family-zoning.html">actually illegal</a> to build any housing structure other than single-family homes on about 75% of residential land in American cities. Inevitably, these policies have severely limited the amount of affordable housing and led to higher costs and eventual displacement and segregation. The higher costs, in particular, have largely <a href="https://www.washingtonpost.com/business/2022/11/30/housing-market-shuts-out-millennials/">priced out millennials</a>.

 ADUs can fill the gap of housing options for millennials in multiple different ways. ADUs that are used as rental units will help put a stop to skyrocketing rental costs, merely by adding to the rental supply. Plus, such units could provide passive income for the homeowner who needs assistance to pay off their mortgage. But with <a href="https://www.businessinsider.com/millennials-living-at-home-as-an-adult-2023-1">so many millennials</a> living at home, the ADU could also serve as a more private space on the property for a family’s adult child or children who can’t afford to purchase single-family homes of their own.

 However, the flip side is also true. The United States is in the midst of a <a href="https://www.unison.com/blog/downsizing-vs-aging-in-place">senior housing crisis</a>. With the number of elderly citizens increasing (expected to <a href="https://www.prb.org/resources/fact-sheet-aging-in-the-united-states/">almost double</a> by 2060), combined with climbing life expectancy, there just aren’t enough options for those who are retired and living (for the most part) on low monthly incomes based on pensions and assets. Those who wish to downsize face enormous housing costs, rising inflation, and low supply–just as millennials do. But those who desire to stay in their homes and communities and age in place (the majority, <a href="https://www.aarp.org/livable-communities/about/info-2018/aarp-livable-communities-preparing-for-an-aging-nation.html#:~:text=A%20conundrum%20we%20face%20is,and%20their%20doctors%20know%20them.">according to the AARP</a>) must contend with rising property taxes and the costs associated with growing older in a home not built to suit the needs of an elderly person (think of stairs, for example). 

 An ADU in the backyard, or attached to the house, can be <a href="https://www.tandfonline.com/doi/abs/10.2752/204191213X13601683874136">a huge game-changer</a> in this scenario. Firstly, ADUs increase the housing supply in general, providing seniors with an increase in affordable housing options within their choice community. But one can imagine a more specific scenario in which elderly parents could relocate to an ADU built to accommodate aging-in-place; such a situation encompasses all the <a href="https://www.caringseniorservice.com/blog/multi-generational-housing">benefits of the multigenerational household</a>, plus the additional (and significant) gain in privacy. When multiple generations of a family share the financial burden of obligations such as groceries and bills, <a href="https://heinonline.org/HOL/LandingPage?handle=hein.journals/elder22&div=15&id=&page=">seniors are enabled</a> to stay within their strict fixed incomes. If their adult children have children of their own, grandparents on site are also able to not only conveniently provide childcare, but be a positive, continuous presence in the lives of their grandchildren. This scenario also ensures that the seniors will not suffer <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7946565/">social isolation</a> and become casualties of the “<a href="https://www.npr.org/2023/05/02/1173418268/loneliness-connection-mental-health-dementia-surgeon-general">loneliness epidemic</a>,” which can lead to health risks comparable to those of <a href="https://www.artandhealing.org/older-adults-loneliness-fact-sheet/?gclid=Cj0KCQjwqoibBhDUARIsAH2OpWh5t2hl_mi5ohmU1IgZHO3I5mXY_g-URXE6l9UmlNVGESIwHO9WEbwaAv5GEALw_wcB">smoking and obesity</a>. 

 
Regardless of one’s age, the simple truth is that housing prices have continued to rise faster than inflation and wages in the United States. Never mind the ability to put a downpayment on a house; many, particularly those working minimum wage jobs, struggle to afford continuously rising rent. Partly, the lack of rental options contributes to this difficulty. <a href="https://www.tandfonline.com/doi/abs/10.2752/204191213X13601683874136">Were districts rezoned</a> to allow homeowners to build an ADU on their property, the supply would increase and lead to lower rent prices. Bonus: homeowners would benefit from the source of monthly income via the rent. 

 
Bearing these facts in mind, Los Angeles has recently established a free, pre-approved <a href="https://ladbs.org/you-adu/standard-plan-information">Accessory Dwelling Unit Standard Plan</a>, which would save homeowners between $20,000-$30,000 in architectural and design costs and cut the time it takes to obtain permits by two to four months. The hope, <a href="https://www.dailynews.com/2023/07/13/thinking-of-adding-an-adu-to-your-property-now-angelenos-can-save-up-to-30k/">articulated by the City Council</a>, is to increase housing stock and combat the lack of affordable housing options in the city.

 
Of course, not every city has a program like Los Angeles. And building an entire tiny home in your own backyard, or an attached (but private) addition to your house, <a href="https://www.tandfonline.com/doi/pdf/10.1080/01944363.2022.2036222">isn’t exactly cheap</a>. However, if you are interested in pursuing the option, you might benefit from a <a href="http://unison.com">Unison</a> equity sharing agreement. Unison enables you to access the equity built up in your home, giving you up to 15% of your home’s value in cash in exchange for a percentage of your home’s future change in value. The best part? Unlike loan products like a HELOC or a reverse mortgage, Unison equity sharing agreements have zero interest and no monthly payments–in other words, no added debt. If this sounds good to you, you can <a href="https://estimate.unison.com/">type in your address</a> and receive a free estimate within minutes and with absolutely no obligation!


 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

AdobeStock 584377657

As states relax their zoning restrictions, the construction of Additional Dwelling Units (ADUs) are on the rise. What are ADUs, and why are they good for society? Read the blog to find out.

What Are ADUs? | Unison

by Lauren Rosales-Shepard, Content Writer

 A reverse mortgage is a type of home loan that allows homeowners over the age of 62 to convert a portion of their home’s equity into cash without selling the property outright. It’s called a “reverse” mortgage because, unlike traditional mortgages where borrowers make monthly payments to the lender, with a reverse mortgage, the lender makes payments to the borrower.

 Due to the age requirement, reverse mortgages are intended for older homeowners who have substantial equity in their homes (i.e. have paid off all or most of their mortgage). Often, homeowners approaching or settling into retirement may require additional income to cover living expenses, healthcare costs, or to otherwise supplement their retirement income or assist in adjustments needed to remain in their home and age in place. 

<h2>Pros of a Reverse Mortgage</h2>
There are several reasons why a reverse mortgage might be a good fit for you. 

<h3>Increases Your Financial Flexibility and Cash Flow</h3>
It’s no secret that America is largely facing a <a href="https://www.fool.com/the-ascent/buying-stocks/articles/america-is-facing-a-retirement-crisis-heres-why/">retirement crisis</a>. As life expectancy increases, many seniors face <a href="https://finance.yahoo.com/news/retirement-crisis-more-americans-turn-160803033.html">a growing concern</a> that they will outlive their savings. Moreover, it is very difficult to keep pace with a rising cost of living on a fixed income. And if you want to <a href="https://unison.com/blog/downsizing-vs-aging-in-place">age in place</a>, there are a number of expenses–from renovations to healthcare and outsourcing home maintenance–that you will eventually need to incur. 

One benefit of the reverse mortgage is that the payment or payments from the lender will increase an otherwise fixed income. Even if you’re confident in your savings, this addition could act as a significant financial cushion for the unpredictability of late life. 

<h3>Eliminates Your Monthly Mortgage Payments</h3>
If you haven’t yet paid off your entire mortgage, those monthly payments could be a huge drain on your income–even if you haven’t yet retired. One major “pro” of a reverse mortgage is that you could use the incoming payments to pay off your existing home loan and its interest. 

<h3>Gives You Several Payment Options</h3>
There is more than one way to receive your reverse mortgage payments. It can come as a lump sum, a line of credit, or monthly payments. This flexibility allows you to choose the option that best suits your financial situation. A lump sum could help you pay off debt, for example, whereas a monthly payment might be a better fit for supplementing a fixed income. 

 <h3>Protects You Against Housing Market Fluctuations</h3>
Another benefit of a reverse mortgage is that it is a non-recourse loan, which means that the borrower (or their heirs) will not be personally liable for any loan amount that exceeds the value of the home at the time the loan becomes due. Therefore, should the housing market experience a downturn and the home’s value decreases to the point where it is below the loan balance, the borrower or their heirs can sell the home to repay the loan, even if the balance exceeds the property value. In other words, they wouldn’t need to use their income, or any other assets, to cover the difference. 

If you choose a line of credit option, where you can simply access the funds when needed, that credit line has the potential to grow over time even if the housing market fluctuates. In the event that you want the line of credit merely as a safety net, you will be able to access those funds in a time of need regardless of the property’s current value. 

 <h3>Don’t Pay Taxes on the Income</h3>
In a reverse mortgage, you don’t pay taxes on the loan proceeds you receive–it’s not considered income. This is because it is basically a loan against the equity of the home, and loans aren’t usually treated as taxable income. 

Depending on your preferences and your unique financial situation, another benefit of a reverse mortgage might be that, since the borrower is not making monthly payments on the loan during its term, there are no interest deductions like there would be with a traditional mortgage. Instead, the interest on the reverse mortgage accumulates over time and is ultimately added to the loan balance; therefore, that interest is not tax-deductible until the loan is repaid. 

 <h3>Allows You to Continue to Live in Your Home</h3>
As long as your home remains your primary residence, a reverse mortgage allows–and, for some, enables–you to stay in your home. Historically, one would need to sell their home and move in order to convert their equity into cash. With a reverse mortgage, you are able to access the equity you’ve built, all while staying in the community you know and the home you love.
 
<h2>Cons of a Reverse Mortgage</h2>
On the other hand, a reverse mortgage is certainly not a one-size-fits-all solution. 

<h3>There’s a Cost to Getting a Reverse Mortgage</h3>
There are some additional costs associated with a reverse mortgage, though some are dependent on the particular lender and terms of the loan. An origination fee covers the lender’s administrative costs for processing the loan; this is usually a percentage of the loan amount. Government-insured reverse mortgage loans require borrowers to pay an upfront Mortgage Insurance Premium, which is a percentage of the home’s appraised value or the FHA lending limit, whichever is lower. Like traditional mortgages, a reverse mortgage also involves closing costs that cover the fees for title searches, title insurance, attorney services, recording fees, etc. Additionally, some lenders charge a monthly servicing fee. 

<h3>Reduces Your Home Equity</h3>
Your home equity is the difference between your home’s market value and the amount which you have paid off from your original loan/mortgage. When you take out a reverse mortgage and access the funds, that loan balance increases over time, and includes both the amount itself and the interest that accrues on the entire outstanding balance. So, imagine that equity shrinking each time you dip into the reverse mortgage funds, because the loan grows. 

<h3> Reverse Mortgages are Complicated</h3>
There are specific eligibility criteria for reverse mortgages, including the age requirement, homeownership status, and property type. Plus, the loan structure is also different from traditional mortgages, which can lead to confusion. As a result of widespread confusion, in fact, borrowers are required to undergo reverse mortgage counseling to ensure that they completely comprehend the terms and implications of the loan. 

Because there are different types of reverse mortgages, such as the government-insured Home Equity Conversion Mortgage (HECM), it’s especially important to carefully compare options. The costs and fees can also vary between lenders. 

Lastly, proceeds from a reverse mortgage can affect eligibility for some government benefits, such as Medicaid and Supplemental Security Income. It is integral that a homeowner understands these implications if they rely on those benefits. 

<h3>Your Home Could be Foreclosed</h3>
Although you are no longer making monthly mortgage payments, one disadvantage of a reverse mortgage is that your home could still be foreclosed. You still need to keep up with property maintenance, property taxes, insurance, and any HOA fees; if you fall behind in any of these, you could lose your home. 

<h3>Impacts Your Heirs’ Inheritance</h3>
Because you reduce your home equity as you borrow from a reverse mortgage, it will have an inevitable impact on the equity available to your heirs after the loan is ultimately repaid. 

<h2> Should I Get a Reverse Mortgage?</h2> 
A reverse mortgage might be a good idea for you if: 
<ul>
<li>You meet the qualification requirements (such as being 62 or older)
<li>You plan to stay in your home for a long time
<li>You don’t have any cohabitants
<li>You can cover the costs of your home
<li>Your house is just an asset to you
<li>Your home is increasing in value
<li>You have no difficulty understanding the reverse mortgage terms</ul> 

However, a reverse mortgage might not be a good fit for you if: 
<ul>
<li>You aren’t eligible, obviously
<li>You plan to move soon
<li>Someone lives with you or depends on your home
<li>You are experiencing financial difficulties (like struggling to pay for property maintenance or taxes)
<li>Your home has sentimental value for you or your family
<li>You have health challenges or unpredictable health
<li>You don’t understand the rules of reverse mortgages
</ul>
 

<h2>Frequently Asked Questions About Reverse Mortgages</h2> 
<h3>What are the costs of a reverse mortgage?</h3>
The costs of a reverse mortgage can include: the origination fee, the appraisal fee, the servicing fee, the counseling fee, and closing costs. Additionally, for HECM loans, borrowers are required to pay an upfront Mortgage Insurance Premium, which is a percentage of the home's appraised value or the FHA lending limit, whichever is lower. There is also an ongoing MIP that is assessed annually on the outstanding loan balance. 

Note: some of these costs can be financed as part of the reverse mortgage, meaning they are added to the loan balance and repaid when the loan becomes due. However, financing the costs will reduce the available funds to the borrower. 

<h3>Who owns the house in a reverse mortgage?</h3>
In a reverse mortgage, the homeowner retains ownership of the house. The title remains in their name throughout the loan term. However, the loan must be repaid when certain conditions are met or when the loan term ends. 

<h3>Can you or your heirs get out of a reverse mortgage?</h3>
To “get out” of a reverse mortgage, either you or your estate must pay off the loan. This can be done at any time, whether you sell the home, use other assets to cover the cost, or refinance the reverse mortgage into a different type of loan, like a conventional mortgage. Repayment options may vary depending on the type of reverse mortgage and the particular agreement into which you have entered. 

<h3>When do I have to repay a reverse mortgage?</h3>
The terms of your agreement are dependent on the particular lender, however, you will need to repay the reverse mortgage very soon after you move out of the home, sell the home, or fail to meet the obligations like paying property taxes. In the event of your death, the reverse mortgage will also become due and payable; your estate will need to pay it back either by selling the home or using other assets. 

<h2>A Unique Alternative to a Reverse Mortgage</h2>
A reverse mortgage can be a solid option for homeowners in particular circumstances. However, if those circumstances don’t apply to you, or you’re curious about other possibilities, consider the Unison equity sharing agreement. 

<a href="http://unison.com">Unison</a> pioneered the equity sharing agreement as a method to empower homeowners to access the equity in their homes without a) selling the home, or b) undertaking burdensome monthly payments and accruing interest. With a Unison equity sharing agreement, you receive up to 15% of your home’s current value in cash, in exchange for a percentage of your home’s change in value in either 30 years or at the time of sale. There are no monthly payments, and no interest, so you don’t have to fret about additional debt. Curious? Visit the Unison website to <a href="https://www.unison.com/how-it-works/">learn more</a>.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

aubrey-odom-ITzfgP77DTg-unsplash

If you're trying to tap into your home equity, you may be wondering, what are the pros and cons of a reverse mortgage? Is a reverse mortgage right for me? Read on to learn more.

Reverse Mortgage Pros and Cons | Unison

By Lauren Rosales, Content Writer

 If your current home is far from your Dream Home, you’re in good company. Maybe you wish to expand your family and need more space in which to do it. Perhaps some of the things that were a compromise when you bought this house are no longer negotiable—you really do need that big bedroom closet, for example, or the narrow galley kitchen just won’t cut it anymore.


 But nobody really enjoys moving. The truth is that moving ranks as one of the most stressful life events, period. In a <a href="https://swns-research.medium.com/moving-tops-the-list-of-most-stressful-life-events-c673b81733e2"> 2020 survey</a>, most participants rated moving as being more stressful than getting a divorce or having children! So why would anyone voluntarily do it? Couldn’t one just renovate? Let’s explore both options.

 HGTV has added “renovation” to just about everybody’s vocabulary. Thanks to a host of popular shows, it seems as though just about everyone has a plan about what they’d change about their house. 76% of Americans <a href="http://zillow.mediaroom.com/2018-10-11-Americans-Would-Rather-Renovate-than-Buy-a-New-Home"> would rather renovate </a> their current homes than make a down payment on a new one—given a set amount of money, that is. Renovations are pricey. And the fairytale renos we see on HGTV are <a href="https://theglasshouse813659743.wordpress.com/category/blogs/e"> far from representative of reality </a>. Unfortunately, the fairytales also <a href="https://www.jstor.org/stable/23273533"> encourage audiences to DIY </a> when maybe there are some things that just shouldn’t be DIY-ed. If you take out a load-bearing wall, for example, that could be an expensive mistake to make!
 

 So, we know that moving is stressful and renovations are complex and expensive. Moving <a href= "https://www.forbes.com/advisor/home-improvement/movers-and-packers-cost/"> isn’t exactly cheap </a> , either, and that’s without considering the cost of the new house, realtor commission, or unavoidable repairs. But who wants to live in a perpetual construction zone? Obviously, there are pros and cons to both options. But to start thinking through them, here are some questions you should ask yourself: 

 
<ul><li><h4>Do you love the literal “where” of where you live?
</li></h4> Are you fond of your neighbors? Do you cherish being on the bus route, or a short walk away from the bakery where you can get cinnamon rolls and coffee on Saturday mornings? Do your kids have friends down the street? Don’t forget to consider boundary lines for specific schools, and your commute to work!
 
If your answer is a resounding “YES,” you should look closely at the possibility of renovation. What is the likelihood that you would find a house in your same neighborhood that has all the amenities or upgrades that your current home lacks? But if you dislike your neighborhood, can’t stand the commute to work, and aren’t comfortable with the school your children are zoned into, granite countertops and walk-in closets are not going to help.

 

<li><h4>What are the top reasons you’re considering this change?
</li></h4> Is the lack of storage in your kitchen beginning to disrupt your daily life? Are your kids getting too old to share a bedroom? Do you want to gouge out your eyes each time you encounter the 1970s pea green tile in the master bathroom? Perhaps you’ve gotten fed up with several issues that used to seem small, but over time have come to eclipse everything else you see when you look at your home.

 
When you consider, you may find that some problems just can’t be solved by renovations—for example, if you have a rapidly growing family and you need multiple extra bedrooms and bathrooms to accommodate them. On the other hand, if your frustration with your house is limited to one room, an unfinished area like a big basement, or multiple smaller-scale issues (especially aesthetic ones, like that pea-green bathroom tile), you might see renovation as the most logical course.

 
<li><h4>Would either option be overwhelmingly more expensive than the other?</li>
</h4> Neither moving nor renovating will be cheap. The <a href= "https://www.homeadvisor.com/cost/additions-and-remodels/remodel-multiple-rooms/"> typical range for renovations </a> is $17,960-$76,951, depending largely on the scope of the project, the quality of materials, and potential complications. But moving, too, has quite a few costs. If you move into a larger home, it will not only cost more on the sticker, but will increase your monthly utilities, your taxes, and you’ll have to buy the furniture and appliances to fill it. Plus, you can expect to spend <a href= "https://www.zillow.com/sellers-guide/costs-to-sell-a-house/"> around $5,000 </a> on simply readying your current home for the market!</li></ul>

 The good news is that Unison can help you consider this third question! Once upon a time, unless you had a tremendous amount of money in savings, <a href= "https://www.zillow.com/sellers-guide/should-you-remodel-or-move/"> the most common ways</a> to pay for considerable renovations were a Home Equity Line of Credit (HELOC), cash-out refinancing, or a home equity loan. Each of these options would charge interest, affecting your long-term finances, and saddling you with debt. Unison offers an alternative—we convert up to 17.5% of your home’s value to cash and give it to you to bring those fairytale projects just <a href= "https://www.unison.com/how-it-works/"> that much closer </a> to your reality. You don’t have to worry about monthly payments or interest. When you do eventually decide to sell your home, only then would you pay Unison an amount equal to the original payment plus or minus a share of your home's change in value.

 Unison is a great fit for those who want to invest in their home for the long-term. After three years, homeowners become eligible to apply for a <a href= "https://www.unison.com/blog/process-agreement-duration/"> Remodeling Adjustment </a>, which would allow you to keep the increase in home value that results from your renovation improvements. And, with our help, you won't make the expensive mistake of cutting corners to trim the cost of your project! Not all renovations equally boost your home’s value, so we can also help you decide <a href= "https://www.unison.com/blog/best-home-improvements-to-increase-value/"> which types of renovations</a> would be the most fruitful for you. 

 We have helped <a href= "https://www.unison.com/success-stories/"> over 8,000 homeowners</a> drastically improve their quality of life, and presenting them with the capital needed to renovate their homes is only one slice of that pie. Some of our homeowners have used the cash to dig themselves out of student loan debt or pay off a mortgage before the accumulating interest overpowered them. Others have financed small business ventures or increased the comfort and security of their <a href= "https://www.unison.com/blog/retirement-2020_equity_reverse/"> retirement</a>. You may find that you can accomplish more than merely one objective with the cash that we offer! If you’re curious to see just how much money you might have left after your renovation, <a href= "https://www.unison.com/home-renovation/">check out our calculator</a> , which will offer you an estimate based on your home’s value, our projected offer, and the average cost of common remodeling projects.

 If you feel like you might be part of the 76% of folks who would rather renovate than move if only they had the money, <a href= "https://www.unison.com/blog/process-applying/"> reach out </a> to Unison today to see how we might be able to make that “if” a “when.”

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Questions to answer if you're thinking of moving or renovating your home

Renovate Home or Move | Unison Equity Sharing

A cash-out refinance is a mortgage refinancing solution that allows homeowners to replace their existing mortgage with a new one–usually at a higher loan amount–and receive the difference between the two loans in cash. Essentially, it allows you to "cash out" a portion of your home's equity in the form of a lump-sum payment while simultaneously refinancing your mortgage.

 

Here’s, briefly, how a cash-out refinance works:
Current Mortgage: This is where you start– you have an existing mortgage on your home with a remaining balance.
New Mortgage: Then you apply for a new mortgage with a higher loan amount than your current mortgage. The new mortgage pays off the existing one–and provides you with additional funds.
Cash Disbursement: The difference between the new mortgage amount and the old mortgage balance is given to you in cash at closing. (This is the “cashing out”).
Repayment: Ta-da! You then repay the new mortgage over time, typically with a fixed or adjustable interest rate and monthly payments. 

Homeowners commonly use cash-out refinances for various purposes, such as home improvements, debt consolidation, or investing in other opportunities. The cash-out refinance in particular can be appealing in situations where the homeowner can take advantage of lower mortgage interest rates while accessing the equity they've built in their homes. 

Of course, the first step in the process of any big financial decision should be to research your choices! If you’re looking for the best method to tap into your growing home equity and make it work for you, read on to see the benefits and the drawbacks of a cash-out refinance. 

<h2>Pros of a Cash-Out Refinance</h2> 
Let’s start with the good stuff. 

<h3>Lower Interest Rates</h3>
Check out the current mortgage interest rates. Are they lower than the rate you’re paying for your present mortgage? A cash-out refinance would allow you to not only replace that mortgage with a new one and take the difference in cash, but also secure the more favorable terms. Say hello to lower monthly payments and long-term interest savings! 

<h3>Larger Loans</h3>
When you opt for a cash-out refinance, you can potentially secure a larger loan amount than what is typically available through alternative borrowing methods, especially such as personal loans or credit cards. 

<h3>Tax Deductions</h3>
Tax-wise, there’s some good news with a cash-out refinance: the cash you take out of your equity during the transaction isn't considered income by the IRS. On top of this, depending on how you use the loan proceeds, a cash-out refinance might qualify you for a tax deduction, too! If you apply the funds to a renovation project that increases the value of your home (called “capital improvements”), you can deduct the interest of your loan. 

<h3>Longer, More Predictable Payment Period</h3>
For the most part, homeowners who obtain a cash-out refinance do so with a 30-year fixed-rate mortgage. Just as with a regular mortgage, you will know how much your monthly payments will be; the interest cannot change. That’s not the case with many other choices for tapping home equity, such as HELOCs. 

<h2>Cons of a Cash-Out Refinance</h2> 

It’s important to note the drawbacks to any potential alternative–let’s do that next. 

<h3>High Interest & Closing Costs</h3>
While a cash-out refinance can be a boon if interest rates are low, the opposite is true when interest rates are high! You wouldn’t want to replace your current mortgage with a new one if the terms were less favorable. In addition, be aware that there are closing costs that add to the overall expense of the loan, including application fees, appraisal fees, title insurance, and other expenses. 

<h3>Foreclosure Risk</h3>
Don’t forget that if you struggle to make the new, higher mortgage payments in a cash-out refinance, your home is serving as collateral for the loan! This could put you at a serious risk for foreclosure. 

<h3>Decreases Your Home Equity</h3>
When you take out a cash-out refinance, you’re replacing your previous mortgage with a brand spanking new one. As a result, you’re erasing the equity you built up and starting from scratch. You won’t be able to tap into that equity for quite some time, and if you should sell your home, you will receive much less of a financial benefit. 

<h3>Longer Closing Times</h3>
A cash-out refinance is not a great choice if you need the funds in a timely fashion–closing times tend to be longer than other equity products. 

<h2>Should I Get a Cash-Out Refinance?</h2> 
At the end of the day, you’re the only one who can really decide whether an alternative is best-suited for you and your unique situation. And if you have a financial advisor, you should certainly consult with them, too. However, generally speaking, a cash-out refinance may be a good idea if: 

<ul>
<li>you qualify for better terms (i.e. lower interest rates)
<li>you intend to use the funds for capital improvements (as discussed above)
<li>you want to consolidate high-interest debt, as a cash-out refi could lower your overall interest costs and simplify your debt management
</ul> 

On the other hand, a cash-out refinance may not be a good idea if: 

<ul>
<li>your credit score is low (which will prohibit you from obtaining favorable terms)
<li>you plan to sell your home soon (as the lost equity will prevent your making any profit)
<li>it comes with unreasonable closing costs
<li>you’re tapping into your equity to meet short-term financial goals, such as covering everyday expenses or vacations; you may end up paying for these expenses over the long term with interest!
</ul> 

<h2>Frequently Asked Questions About Cash-Out Refinance</h2>
 

<H3>How Much Are Cash-Out Refinance Closing Costs?</h3>
The closing costs for a cash-out refinance can vary widely based on several factors, such as your location, the chosen lender, the loan amount, and the specific terms of your refinance. On average, closing costs for a cash-out refinance (typically) range from 2% to 5% of the total loan amount. But you may also be responsible for some of the following: 
<ul>
<li>Origination Fees: cover the lender's administrative costs for processing your loan application 
<li>Appraisal Fee: An appraisal of your property is typically required to determine its current value.
<li>Credit Report Fee: As part of the underwriting process, lenders often charge a fee to pull your credit report.
<li>Title Search and Title Insurance: cover the cost of researching the property's title history and providing insurance to protect against title issues
<li>Recording Fees: When your new mortgage is recorded with the county or municipality, there are associated fees.
<li>Homeowners Insurance: Lenders may require you to prepay a portion of your homeowners insurance as part of the closing costs.
<li>Property Taxes: Depending on your loan and the timing of your refinance, you may need to pay property taxes upfront.
<li>Attorney or Escrow Fees: In some states, an attorney or escrow company may be involved in the closing process, and their fees can be included in the closing costs.
<li>Courier Fees: These fees cover the cost of sending documents between parties involved in the transaction.
</ul> 

<h3>How Much Money Can You Get With a Cash-Out Refinance?</h3>
The amount of money that you can obtain from a cash-out refinance is dependent on multiple factors, such as the current value of your home, the outstanding balance on your existing mortgage, the loan-to-value (LTV) ratio allowed by your lender, and the specific terms of the refinance. 

Most lenders allow a maximum LTV ratio of 80% to 85% for cash-out refinances. This means that the new loan amount, including the cash you receive, cannot exceed 80% to 85% of your home's current appraised value. If you subtract the outstanding balance on your existing mortgage from the maximum loan amount, you should have a decent idea of the “cash out” for which you will be eligible. 

<h3>Can I Refinance My Home Without Taking Cash Out?</h3>
You can refinance your home without taking cash out; such a refinance is commonly referred to as a "rate and term refinance" or a "no cash-out refinance." In a rate and term refinance, the primary goal is to obtain a new mortgage with more favorable terms, such as a lower interest rate or a different loan term, without tapping into your equity. 

<h2>A Unique Alternative to Cash-Out Refinance</h2> 

If you want to access your equity, but aren’t sure that a cash-out refinance is quite right for you, you should consider a <a href="https://unison.com">Unison</a> equity sharing agreement. Like a cash-out refinance, a Unison Agreement enables you to dip into the funds trapped in your home so that you can use them to live the life you want. However, unlike a cash-out refinance, a Unison Agreement doesn’t require monthly payments or accrue interest. Instead, Unison gives you up to 15% of your home’s current value in cash in exchange for an agreed upon percentage of your home’s future change in value at the end of the agreement. Unison has helped over 10,000 homeowners to access their equity and achieve their financial goals, whether by saving for retirement, renovating their homes, or starting a new business venture. If you want to tap into your equity, but don’t want to mess with interest rates, <a href="https://estimate.unison.com">get a free estimate today</a> with zero obligation or effect on your credit score and see whether Unison might be a good fit for you!

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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 If you’re thinking about tapping into your equity, it’s important to consider all of your choices. Learn more about the pros and cons of the cash-out refinance in this blog post.

Cash-Out Refinance Pros & Cons | Unison Equity Sharing

Lab results are a good measure of internal health. A personal trainer offers advice on muscular health. And a therapist can diagnose mental health.

But what's a good measure of financial well-being?

As a rule, mortgage lenders prefer a back-end ratio of 28% or lower. And 36% or less is an ideal front-end ratio. 

Let's unpack what these numbers mean.

<h3>What is a debt-to-income (DTI) ratio?</h3>

In the lending industry, the debt-to-income (DTI) ratio is one of the key indicators used to gauge financial health.

For banks and lenders, your DTI ratio is a snapshot of your financial situation. It gives them an idea of how well you manage your finances and how much of a monthly mortgage payment you can afford. A DTI calculation compares total monthly debt payments to monthly gross income.

<h3>Calculating your DTI ratio</h3>
When determining a home loan mortgage rate, most mortgage lenders required two separate DTI calculations: the front-end ratio and the back-end ratio.

<h5>Front-end DTI ratio</h5>

The front-end ratio is the percentage of your gross monthly income that will be used to pay housing expenses. You’ll also hear it referred to as the housing expense ratio.

There are typically four housing costs used to calculate front-end debt:
<ul>
 <li>Monthly mortgage payment</li>
 <li>Property taxes</li>
 <li>Homeowners insurance</li>
 <li>HOA dues</li>
</ul>
 
<h5>Back-end DTI ratio</h5>
Back-end debt includes two separate totals. The first is the total of all monthly payments in the categories that appear on a credit report:

<ul>
 <li>Mortgage payment or rent payment</li>
 <li>Auto loan payment</li>
 <li>Personal loan payments</li>
 <li>Student loan payments</li>
 <li>Alimony and child support payments</li>
 <li>Credit card debt in the form of minimum credit card payments</li>
 <li>Monthly minimum payment on a home equity line of credit (<a href="https://www.unison.com/article/how-to-qualify-for-heloc">HELOC</a>)</li>
 <li>Other monthly debt payments included on your credit report</li>
</ul>

To complete the back-end ratio calculation, add your total monthly payments from the list above to your total front-end debt. This figure, represented as a percentage, is your overall DTI ratio. A high DTI ratio informs lenders that too much of your income goes toward your total monthly debt and that it may be risky to offer you a new loan.

Which brings us to the big question: What is a good debt to income ratio? 

<h3>The ideal debt-to-income ratio</h3>
As mentioned above, mortgage lenders like a back-end ratio of 28% or lower. And 36% or less is an ideal front-end ratio.

Depending on the type of qualified mortgage you apply for, these ranges may change. For example, Fannie Mae- or Freddie Mac-backed conventional loans may allow for a higher DTI ratio—up to 50%, in some cases. The borrower must have excellent credit, sizable assets and substantial <a href="https://www.unison.com/article/down-payment-guide-for-first-time-home-buyers">down payment</a>.

With Federal Housing Administration (FHA) loans, home buyers with a higher DTI ratio often qualify for more competitive interest rates if their credit score is 620 or better. VA loans are even more generous. The maximum allowable back-end ratio increases to 41% and front-end ratio calculations are not required.

If you're confident that your DTI ratio meets the parameters for a qualified mortgage, the next step is to determine your down payment. 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

hoyoung-choi-IZLkf1771lY-unsplash

Understand what's considered a good DTI ratio, how it's calculated, and how it helps you buy a home.

What's a Good Debt-to-Income Ratio? | Unison Equity Sharing

When people think about buying a home, one of the first places they often look is <a href="https://www.zillow.com/" target="_blank">Zillow.com</a>. It’s a very helpful website that lists homes for sale in cities and towns all across the U.S. One useful feature is the “Zestimate” which is Zillow’s proprietary estimate of a home’s current market value.
<img src="https://contentimages.o-prod.unison.com/images/blog/Are-Zillow-Home-Values-Accurate-Can-You-Trust-a-Zestimate-2-e1518203786395.jpg">
While this is a useful tool for home buyers, there are often questions about the accuracy of Zillow’s estimated home values. So the question is, can you trust the Zestimate?

<h2>How Zillow’s Zestimate is Calculated</h2>
While Zillow cannot reveal their exact process for making home price estimates, they have tried to be as transparent as possible and have frequently reiterated that these are indeed only estimates – they are not 100% accurate.

Here’s what we know about the calculations that go into the Zestimate. The Zestimate is recalculated every single day, and is based on public data along with user-submitted data.

For example, publicly recorded data will tell Zillow how much nearby homes have sold for, and user-submitted data could tell them about the specific characteristics of the home, such as whether it was recently remodeled and how many bathrooms it has. They also know how quickly homes are selling in that neighborhood and whether they are selling above the asking price. (<a href="https://www.zillow.com/zestimate/" target="_blank">Learn about their methodology here</a>)

The company has a sophisticated algorithm that uses all types of data to arrive at an estimate of a single home’s price.

<h2>Why Zillow Estimates Are Sometimes Inaccurate</h2>
While Zillow is very sophisticated, they can only make an educated guess. Each home is different, and they cannot possibly know every little detail about every home in America. So it is perfectly reasonable to expect that their estimates will be a little bit inaccurate (and occasionally very inaccurate).

According to Zillow’s <a href="https://www.zillow.com/zestimate/#acc" target="_blank">website</a>, the median error rate of a Zestimate is 4.3%. What this means is that Zillow’s estimate is within 4.3% of the home value about half the time. They also indicate on their site that their Zestimates are within 20% of the sales price 86.9% of the time. It’s important to note that 20 percent of a home’s sale price can potentially mean tens or even hundreds of thousands of dollars.

The bottom line is that the Zestimate serves as a starting point, which can give you an idea of what a home might sell for. It’s not the end of the conversation – only the beginning.

<h2>What Experts Say About the Accuracy of Zillow’s Estimates</h2>
In a 2014 Washington Post <a href="https://www.washingtonpost.com/news/where-we-live/wp/2014/06/10/how-accurate-is-zillows-zestimate-not-very-says-one-washington-area-agent/?utm_term=.506197b8096e" target="_blank">article</a> by David Howell, the chief information officer for McEnearny Associates, he writes that “No algorithm, however sophisticated, can quantify the value of a kitchen that was remodeled just before a home was put on the market or a yard that is poorly maintained. It simply isn’t possible for any AVM to predict the value of a home with a level of accuracy sufficient to make a housing decision.”

He continues on to say that many consumers are fixated on a number they’ve found online, when in reality they should look for advice from their real estate agent who knows the local housing market intimately and can guide buyers toward a decision that is best for them.

Zillow themselves write <a href="https://www.zillow.com/zestimate/#pros" target="_blank">on their website</a> that real estate agents should “show Zillow’s own accuracy numbers and talk about why the Zestimate is a good starting point as well as a historical reference, but it should not be used for pricing a home.”

<h2>Conclusion</h2>
If you’re a home buyer and are looking at a home with a wide discrepancy between the Zestimate and the listed value, consult with your real estate agent for advice on whether or not they think the number is accurate and whether you could potentially purchase the home for less than the listing price. This is an especially pertinent question in seller’s markets where homes tend to go pretty quickly and for much higher than the asking price.

If you’re trying to sell your home and have noticed that the Zestimate is much lower than your asking price, work with your real estate agent to use the tools on your Zillow home listing (i.e. “<a href="https://www.zillow.com/sellerlanding/edityourhome/" target="_blank">Edit your home facts</a>”) to make it more accurate. Sometimes the data that Zillow has is outdated and may not include any renovations or updates made to the home. Providing this information could improve the accuracy of the estimate.

Above all, always be sure to consult with a licensed real estate agent if you have any questions on the valuation of a home.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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The "Zestimate" is a bit of a secret sauce, which Zillow will admit is not always perfect. But it's a valuable tool nonetheless – here's what we know about the calculation process.

Are Zillow Home Values Accurate? | Unison Home Equity Sharing

Tapping into your home equity is a great way to access funds for immediate financial needs. While selling your home is one way to achieve this goal, there are many other solutions that allow you to take equity out of your home without abandoning your property. Learn about these six alternative ways to get equity out of your home. 

<ul>
<li><a href="#CashOutReFi">Cash-Out Refinance</a>
<li><a href=”#HELOC”>Home Equity Line of Credit</a>
<li><a href=”#HomeEquityLoan”>Home Equity Loan</a>
<li><a href=”#HomeSaleLeaseBack”>Home Sale Leaseback</a>
<li><a href=”#ReverseMort”>Reverse Mortgage</a>
<li><a href=”#EquityAgreement”>Home Equity Sharing Agreement</a>

</ul> 
<a><h2 id="CashOutReFi"> Cash-Out Refinance </h2></a>

With cash-out refinancing, a homeowner replaces their current mortgage with a newer, larger loan. This <a href=”https://www.unison.com/blog/refinancing_tips/”>refinancing strategy</a> results in access to a lump sum of cash reflecting the difference between your new loan amount and the existing mortgage balance. 

<h3>How Does a Cash-Out Refinance Work?</h3> 

In the <a href=”https://www.unison.com/blog/how-long-to-get-cash-out-refinance/”>cash-out refinance process</a>, you'll first need your property appraised for its current market value. Then, you'll submit an application for a new mortgage loan, which indicates the amount you want to borrow on top of your current balance. Upon approval, you'll receive a new mortgage balance that includes both of these amounts. Then, after paying off your existing mortgage with the funds received, you can apply the remainder towards immediate financial demands. 

To receive approval for a cash-out refinance, you must typically have at least 20% equity in your home, a good credit score, and proof of reliable income. <a href=”https://www.unison.com/blog/cash-out-refinance-vs-home-equity-loan/”>Similar to a home equity loan</a>, a cash-out refi involves fixed monthly payments that begin immediately. 

<h3>Pros of Cash-Out ReFi</h3> 

Before choosing this option to unlock home equity, take into account the following <a href=”https://www.unison.com/blog/cash-out-refinance-pros-and-cons/”>cash-out refinance pros and cons</a>. 

<ul>
<li>Upfront Cash: Cash-out refinancing offers you a lump sum of money that can be used for mortgage payments and other expenses in relatively no time.
<li>Lower Interest Rates: Mortgage interest rates are usually lower than other forms of borrowing. Plus, if current mortgage interest rates are lower than the rate you're paying for your existing mortgage, you could have smaller monthly payments. 
<li>Tax Deductions: You may be eligible for tax deductions on the interest you pay on your cash-out refinance.
<li>Flexible Terms: Cash-out refis typically involve fixed, predictable repayments, while also offering flexible terms featuring longer repayment periods, variable interest rates, and more.
</ul> 

<h3>Cons of Cash-Out ReFi</h3> 
<ul>
<li>Increased Debt: With a higher loan amount and potentially higher monthly payments, you may see an increase in mortgage debt.
<li>Equity Reduction: Cash-out refinancing erases the amount of equity you've built in your home and limits your ability to access funds in the future.
<li>Closing Costs: Application costs, appraisal fees, and other closing costs add up when cash-out refinancing.
<li>Risk of Foreclosure: Failure to pay your new mortgage payments could put your home at risk of foreclosure.
</ul> 

<a><h2 id="HELOC"> Home Equity Line of Credit</h2></a>

A <a href=”https://www.unison.com/blog/about-helocs/”>home equity line of credit</a>, also known as a HELOC, is a borrowing option that allows you to access cash using your home equity as collateral. 

<h3>How Does a Home Equity Line of Credit (HELOC) Work?</h3> 

HELOCs function similarly to a traditional credit card, with your home acting as the credit line. 

To begin the <a href=”https://www.unison.com/blog/how-does-a-heloc-work/”>HELOC mortgage process</a>, a lender will need to assess three factors: your current financial standing, the amount of home equity you have, and your home's current market value. After you're approved for a home equity line of credit and a credit limit is determined based on your home's equity, you can use the funds at any time for any amount (up to the limit). 
In order to get approved for a HELOC, you must be at least 18 years old, have a stable stream of income and good credit score, and own around 15% to 20% equity in your home. Once your HELOC's funds are depleted, you'll enter the repayment period, which typically involves monthly payments on the principal and accrued interest. 

<h3>Pros of Home Equity Line of Credit</h3> 

As with other equity alternatives, there are several <a href=”https://www.unison.com/blog/pros-cons-heloc/”>advantages and disadvantages of home equity lines of credit</a> to consider before borrowing.
<ul>
<li>Lower Interest Rates: You can usually expect to see lower interest rates on <a href=”https://www.unison.com/blog/best-fit-for-HELOC-and-alternatives/”>HELOCs compared to other borrowing options.</a>
<li>Flexible Use: Borrowers can use HELOC funds for a wide variety of purposes and are given flexibility in how and when they can access cash.
<li>Long Draw Period: Should your home's value increase during the life of the HELOC, your equity and borrowing capacity may also grow, providing additional access to funds.
<li>Tax Benefits: If funds are used on relevant payments, such as home improvements, a HELOC's interest may be eligible for tax deductions. 
</ul> 

<h3>Cons of Home Equity Line of Credit</h3> 
<ul>
<li>Variable Interest Rates: Over the course of a HELOC, there is a potential for interest rates to change and result in higher monthly payments.
<li>Temptation to Overspend: Entering a HELOC requires disciplined spending to accumulate less debt than you can afford to repay.
<li>Lower Home Equity: It's possible that you could owe more on your HELOC than what your home is worth if your home value decreases.
<li>Risk of Foreclosure: Since a HELOC uses your home as collateral, missing required payments puts your property at risk of foreclosure.
</ul>
 

<a><h2 id="HomeEquityLoan"> Home Equity Loan </h2></a>

Home equity loans, or second mortgages, are fixed-term loans that allow homeowners to borrow against their property's equity. 

<h3>How Does a Home Equity Loan Work?</h3> 

Acquiring a home equity loan requires a lender to assess your financial standing and the amount of home equity you have. If you're approved, you'll be given an upfront lump sum based on these factors, which can be used to cover important expenses. 

Home equity loans <a href=”https://www.unison.com/blog/reverse-mortgage-vs-home-equity-loan/”>vary from reverse mortgages</a>, which do not involve regular monthly payments. In a second mortgage, you must begin paying it back immediately. While home equity repayment periods differ by lender, this typically occurs over the course of five to 30 years. Meeting home equity loan requirements usually means having at least 15% to 20% equity in your home, a strong credit score, a stable source of income, and a low debt-to-income ratio. 

<h3>Pros of Home Equity Loans</h3> 

There are many <a href=”https://guide.unison.com/blog/pros-cons-home-equity-loan/”>pros and cons of home equity loans</a> to be aware of, including:
<ul>
<li>Access to Cash: A single lump sum payment is perfect if you're looking to pay off major expenses quickly. 
<li>Stable Interest Rates: Home equity loans function at fixed rates and involve consistent monthly payments, regardless of market conditions.
<li>Extendable Repayment Period: It's possible for the loan's repayment period to be extended up to 30 years, making monthly payments more manageable.
<li>No Age Requirement: Most lenders do not have a minimum age requirement for home equity loan eligibility.
</ul> 

<h3>Cons of Home Equity Loans</h3> 
<ul>
<li>Decreased Home Equity: If the real estate market drops, your home value could drop, too, and leave you with a loan balance exceeding your property's value.
<li>Risk of Foreclosure: Because this loan is secured by your home, you could be at risk of losing your property if you fail to meet your monthly payments. 
<li>Additional Costs: On top of adding a second monthly mortgage payment, home equity loans come with appraisal fees and closing costs. 
<li>More Qualification Requirements: As opposed to other home loans, home equity loans usually follow stricter eligibility criteria. 
</ul> 

<a><h2 id="HomeSaleLeaseBack"> Home Sale Leaseback </h2></a>

If you'd prefer to <a href=”https://www.unison.com/blog/how-to-access-home-equity-without-debt/”>access home equity without refinancing or accruing debt</a>, consider a home sale leaseback. This is a real estate transaction in which a homeowner sells their property and becomes a tenant, continuing to live in their home (or elsewhere) while paying rent for the house. 
<h3>How Does a Home Sale Leaseback Work?</h3> 

After finding a buyer, the home sale leaseback option works just like selling a home. In this sell and leaseback process, you'll define terms and transfer ownership to the buyer, who will then ask you to sign a lease agreement. Then, you can either begin living in your home as a tenant or lease the property out while living elsewhere, as long as you make regular rental payments to the buyer-turned-owner. 

<h3>Pros of Home Sale Leaseback</h3> 

Here are a few sale and leaseback advantages and disadvantages that can help you decide whether this option is right for you. 
<ul>
<li>Quick Access to Funds: Selling your property gives you immediate access to a lump sum that you can use toward other expenses as needed. 
<li>Rental Perks: Selling and renting back your house can help eliminate/decrease any existing mortgage debt and allow you to remain unaffected by fluctuations in the real estate market.
<li>Negotiable Terms: Because buyers and sellers can negotiate terms independent of traditional lending institutions, leasebacks might be more flexible and help you avoid additional fees.
<li>Flexibility to Stay or Move: Entering a home sale leaseback gives you the flexibility to remain in your current home or relocate as you wish. 
</ul> 

<h3>Cons of Home Sale Leaseback</h3> 
<ul>
<li>Loss of Ownership: Once you give up ownership of your home, you can no longer benefit from property appreciation, build home equity, or make property-related decisions. 
<li>Risk of Eviction: Failure to make lease payments or other violations to the contract could result in eviction. 
<li>Rental Payments: Home sale leasebacks result in regular rental payments, which could increase based on market fluctuations depending on the terms. 
<li>Tax Liabilities: You may be responsible for potential tax liabilities on the capital gains associated with the sale of your property. 
</ul>
 

<a><h2 id="ReverseMort"> Reverse Mortgage </h2></a>

<a href=”​​https://www.unison.com/blog/reverse-mortgage-payments-costs/”>Reverse mortgage loans</a> are unique alternatives to home loans. They allow homeowners over the age of 62 to convert a portion of their home's equity into cash. Unlike traditional mortgages, where homeowners make monthly payments to a lender, reverse mortgages require lenders to make regular payments to the borrower. 

<h3>How Does a Reverse Mortgage Work?</h3> 

To get a reverse mortgage, you must first submit your application and home appraisal. Once you are approved, you'll be given an estimate determined by the amount of equity you've built in your home. Rather than making regular payments to the lender, these payments will be disbursed to you to use as you please. You (or your loved ones) must repay these funds when you sell your home or pass away. To be eligible for a reverse mortgage, you must be at least 62 years old and have a significant amount of home equity. 

<h3>Pros of Reverse Mortgages</h3> 

Below are the primary <a href=”https://www.unison.com/blog/reverse-mortgage-pros-and-cons/”>advantages and disadvantages of reverse mortgages.</a> 
<ul>
<li>Increased Cash Flow: Payments from a reverse mortgage can help supplement your income or provide you with a financial safety net.
<li>Flexible Payment Options: Reverse mortgage funds can be distributed to you via a lump sum payment, line of credit, regular monthly payments, or a mix of these options. 
<li>Continue Living in Your Home: One of the major benefits of a reverse mortgage is that you can continue to maintain ownership of (and live in) your home. 
<li>Safe From Market Fluctuations: Reverse mortgages are considered non-recourse loans, meaning you won't be personally liable for any loan amount that exceeds your home's value.
</ul>
 

<h3>Cons of Reverse Mortgages</h3> 

<ul>
<li>Additional Costs: Depending on the lender and terms, reverse mortgages can incur additional costs, including administrative fees, closing costs, monthly servicing fees, and more.
<li>Accumulating Interest: A reverse mortgage accumulates interest over time, which may decrease the amount of home equity you own and negatively impact your heirs until the loan is repaid.
<li>Impact on Government Benefits: Receiving a reverse mortgage may make you ineligible for government benefits, such as supplemental security income (SSI) and Medicaid.
<li>Risk of Foreclosure: Falling behind on maintenance fees, property taxes, or other homeowner payments could put you at risk of losing your home.
</ul>
 

<a><h2 id="EquityAgreement"> Home Equity Sharing Agreement </h2></a>

<a id=”#EquityAgreement”><h2>Home Equity Sharing Agreement</h2></a>

A Home Equity Sharing Agreement (HESA), Shared Equity Agreement, or Home Equity Investment, is a way for homeowners to access a portion of their home equity without taking on additional monthly payments or selling their property. 

<h3>How Do Home Equity Agreements Work?</h3> 

The process and terms will vary by provider, but generally a home equity agreement works by homeowners first receiving a lump sum of cash in exchange for a percentage (typically between 15-50%) of the appreciation of their home in the future. Unlike a traditional loan, you don't have to make any monthly payments and simply pay when you sell your property or the agreement ends. 

<h3>Pros of Home Equity Agreements</h3> 

Below are the following pros and cons of a home equity sharing agreement. 
 
<ul>
<li>Access to Funds: You can get a large sum of money without taking on additional debt.
<li>No Monthly Payments: You don't have to worry about making monthly payments.
<li>Home Appreciation: You can share in the profits if your home value increases.
<li>Flexible Terms: Homeowners can choose the term of the agreement and the percentage of appreciation to share.
</ul>
 

<h3>Cons of Home Equity Agreements</h3> 
<ul>
<li>Loss of Equity: You will be giving up a portion of the potential change in value of your home to the investment company.
<li>Not One-Size-Fits-All: Equity sharing agreements are unique, just like the homeowners they serve. As such, they are not the right fit for everyone. It’s important to make sure you understand the agreement and how it may impact you.
<li>Refinancing: Some mortgage lenders may decline to provide new loans to you because you have subordinate financing that shares in equity or home appreciation.
</ul> 

With Unison's <a href=”https://www.unison.com/blog/equity-sharing-agreements/”>equity sharing agreement</a>, many of these downsides don't apply. We'll convert up to 15% of your home's value to cash, so you can <a href=”https://www.unison.com/blog/process-funding/”>put those funds to work</a> for you and continue owning your home. Like other home equity agreements, Unison features no monthly payments or added interest. But the best part is that we often share in your loss should your home decrease in value. And we make it easier than ever to <a href=”https://www.unison.com/blog/process-termination/”>end your agreement</a> or sell your home if your circumstances suddenly change. 

<a href=”https://estimate.unison.com”>Get a free estimate</a> with Unison today, with no financial obligation or impact to your credit.
 
 
 
 
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

AdobeStock 225777674

Looking for alternative ways to get equity out of your home? Check out these six options for tapping into home equity and converting it to cash.

Alternative Ways to Get Equity Out of Your Home | Unison

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Discover how to tap into home equity without refinancing. From HELOCs to home equity agreements, here are the six best alternatives to a cash-out refinance.

How to Take Equity Out of Your Home Without Refinancing | Unison

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Looking for financial options other than a reverse mortgage? Consider these valuable reverse mortgage alternatives for help meeting your financial goals.

9 Alternatives to a Reverse Mortgage | Unison

Buying a home isn't always a straightforward, linear process, but it's easier to achieve homeownership when you know what you're getting into and can anticipate the next move. In a competitive market, it's especially important to be one step ahead. 

Get your finances in order, have a realistic expectation of what you can afford, and know which trusted professionals will add value and help you navigate the path. Get ready to go-go-go.
<h2>Steps to Buy a House: Home Buying Guide</h2>
Whether it's your first home or you just need a refresher, it's important to remember all that goes into the planning and the home buying process.
<ul>
<li>Determine what you can afford. Understand your personal finances and be realistic about your budget. Avoid the temptation to look at things outside your top amount.</li>
<li>Prepare a down payment. Bump up your savings and crunch your numbers. If you can't afford 20%, learn more about loan options and home co-investment opportunities.</li>
<li>Get preapproved for a mortgage. Get a bank's preapproval to prove to yourself—and to a seller—that you are a serious buyer who is qualified to purchase a home within a certain price range.</li>
<li>Find a real estate agent. Get referrals, and meet with real estate agents until you find one you trust.</li>
<li>Find a home. Explore homes in your price range, and schedule visits to see them in person.</li>
<li>Make an offer. When you find your dream house, work with your real estate agent to put in a formal offer.</li>
<li>Get a home inspection. A home inspector will help you identify any issues with the home, or validate that it's in tip-top shape.</li>
<li>Get a home appraisal. An appraisal will be required by the bank to measure the value of the home.</li>
<li>Get into escrow and complete paperwork. Set up a third-party account to hold your initial earnest money deposit, loan documents, deeds, and anything other documentation related to the settlement of the home.</li>
<li>Close on your new home and move in. Sign the official documents, make final payments, and get the keys to your new house.</li>
<h3>Glossary of Important Homebuying Terms</h3>
You'll hear things like: escrow, earnest money, private mortgage insurance, down payment, home equity sharing agreement and mortgage payment.

Buying a home comes with learning a whole new vocabulary. Learn what these terms mean and why they're important in our <a href="https://www.unison.com/article/first-time-homebuyer-definition-guide">First-Time Homebuyer Definitions Guide</a>.

Now, let's dive in...

<h3>1. Determine how much you can afford</h3>
Determine an affordable price point by diving into your personal finances. In addition to your own budget, consider the cost of homes in your area to know what is realistic. 

A total mortgage payment should be less than 35% of your salary (or roughly ⅓). If you earn $60,000 each year, your monthly mortgage payment should be no more than $1,750.

If you currently pay rent, consider what type of home that monthly payment might afford you. Use an online mortgage calculator to factor in property taxes, <a href="https://www.unison.com/article/how-much-interest-to-pay-on-mortgage">interest rates</a> (adjustable rate or fixed rate), and homeowners insurance. You might just find that a rent of $1,750/month can translate to a $200,000 house in some markets. In other markets where property taxes are very high, that same $1,750 monthly rent payment might only afford you a $100,000 house.

Research the median price point in your area. If you're looking for a 4-bedroom/3-bathroom home in the suburbs, the price point likely looks a lot different than comparable space in a popular metro area. Tax fluctuations from town-to-town can also greatly influence how much home you can afford in each area. Doing your research will set expectations.

<h3>2. Prepare a down payment</h3>
Having a <a href="https://www.unison.com/article/down-payment-guide-for-first-time-home-buyers">down payment</a> influences many aspects of the process, including loan eligibility and the overall cost of that loan. Save as much as you can to reach the goal of having at least 20% of the home's sale price as a down payment. Stick to a savings plan, cut back on expenses and save your tax returns to achieve the largest down payment possible. 

If you can't afford a <a href="https://www.unison.com/article/10-percent-versus-20-percent-down-mortgage">20% down payment</a>, never fear. There are many first-time homebuyer programs and other finance products available to help alleviate the stress of saving for a down payment and make homeownership a reality.

Government-backed programs such as VA loans and FHA loans make it possible for certain home buyers to purchase with 0–3% of the home's value, meaning that very little cash is required upfront.

A home equity sharing agreement can also make it easier to find the money you need for a 20% down payment.

When you are aligned on how you can get to a 20% down payment for the price home you are looking to buy, you're ready to move on to the next step.

<h3>3. Get preapproved for a mortgage</h3>
A free mortgage pre-qualification from a mortgage lender proves that you're financially prepared to find your home. The mortgage broker will ask to see your proof of income (such as pay stubs and tax records), debts (such as auto loans and student loans), and proof of assets to confirm your debt-to-income ratio. Once they review your qualifications, you'll be able to secure a mortgage pre-approval for a specific loan amount. 

When house hunting, being pre-qualified for a home loan shows the seller and their agent that your intent to buy is serious and not spontaneous.

You can make an offer on a house without a mortgage preapproval, but an offer contingent on financing is less favorable.

Avoid making large purchases or withdrawals while you're in the home buying process, and pay off all credit card debt. Fluctuations in your credit report and credit score will come into question with the lender.

<h3>4. Find a real estate agent</h3>
It's best to work with a real estate agent that you vibe with, so get referrals and shop around. If you first find a lender, they may also be able to refer you to a real estate agent. Selecting a representative is a personal decision, but be sure that your chosen real estate agent is easy to communicate with, available on your schedule, and committed to helping you with your home search. 

Real estate agents don't make any money until the home is sold, so it's in their best interest to help you navigate the process. Commissions are commonly calculated at 6% of the sales price, broken down as 3% for the seller's agent, and 3% for the buyer's agent.

If the sale falls through before closing, the real estate agents are usually compensated by the earnest money down payment held in escrow.

<h3>5. Start looking for a house</h3>
With your preapproval letter and representation, it's time to dive into the real estate market. Share a home buying checklist with your real estate agent so you're both on the same page. Include general specifications that define your perfect home and neighborhood.

Example of these preferences: 
<ul>
 <li>School district of choice</li>
 <li>Property size</li>
 <li>Neighborhood characteristics</li>
 <li>Traffic</li>
 <li>Walkability</li>
 </ul>

Scour online listings, and search for open houses. Be quick to alert your agent when you find a home that you like, and schedule a time to see it in person as soon as you're able. 

In many markets, it's not uncommon for multiple offers to be made on a house the same day it goes up for sale, so time is of the essence if you want to compete with other buyers.

You may also find that the homes you gravitate to online don't check all the boxes when you see them in person. If this is the case, let your real estate agent do some research and make other recommendations. Changing the search criteria ever-so-slightly can open up a world of new opportunities.

<h3>6. Make an offer</h3>
You found your dream home. Your real estate agent is standing by to help you through the process of submitting a purchase offer.

You can also make an offer if you aren't represented by a real estate agent by using an online form to guide the general terms of your offer. It's always best to rely on a real estate attorney to review an offer before presenting it to catch any glaring inaccuracies or make recommendations to make your offer even stronger.

If you're preapproved for a home purchase, you will know what type of loan you are looking to secure and will share this information with the seller in your offer letter. 

Let the seller know what contingencies, such as a home inspection or closing schedule, need to be considered. In the offer letter, you state that your offer must be reviewed and accepted by a certain date. No one likes waiting indefinitely, so it's normal to request feedback within 3–5 days.

If you aren't preapproved, the seller may not consider you a serious buyer. One way to bypass the preapproval is to get creative with your offer by reducing contingencies or showing the seller that you have a substantial deposit of <a href="https://www.unison.com/article/how-does-earnest-money-deposit-work">earnest money</a> with a notarized bank statement.

How do you know what price to offer? It's difficult to know whether to offer more or less than the asking price. Have an understanding of your competition, the price of the home relative to its assessment and other comparable properties in the area. Both your real estate agent and loan officer can help you justify the purchase price you offer.

If it's a buyer's market, don't be afraid of throwing out a low offer price.

In a seller's market, you may need to go higher than the list price, but that's when understanding the comps comes into play. Use public information about similar (comparable) homes that have recently sold in the same area to validate the amount you decide to offer.

Also, be prepared for a counteroffer from the seller. A counteroffer is your opportunity to try again—you can accept their modified terms or try to compromise to reach a sale agreement. You may need to use this counteroffer time to look into other options such as a different type of mortgage or a home equity sharing agreement.

<h3>7. Get a Home Inspection</h3>
After your offer is accepted, you'll have a short window in which to schedule your home inspection. The inspection, performed by a qualified third-party, is a walk-through to confirm the condition of the home and flag any potential problem areas. 

Areas a home inspector will check:
<ul>
<li>Hot water tank and system</li>
<li>Electrical system</li>
<li>Roof</li>
<li>Foundation</li>
 </ul>

Expect the inspection of the property to take a few hours, because they are thorough. 

The buyer can choose to use findings of the report to counteroffer, or ask for repairs before closing.

<h3>8. Get a Home Appraisal</h3>
Separate from a home inspection, a lender will send an appraiser to the home to value its worth. This secondary property review will also take upwards of a few hours. 

The reporting from the appraiser allows the bank to determine whether the amount they're lending is fair. They need to know that if you default on your loan, they'll be able to sell the property for enough to break even on their investment. 

This reporting is also helpful for a buyer, as any expected improvements will be outlined. Depending on the type of home loan you are getting, improvements can be mandatory before closing. If the improvements are incomplete, the lender may choose not to finance.

The amount you're paying is in line with the property's value, all parties involved will work to confirm a closing date.

<h3>9. Escrow & Paperwork</h3>
The escrow account is a neutral place to store earnest money down payments and legal documents such as property deeds while the home sale is in limbo. The buyer will choose the escrow company, but the seller is also required to add items into the account prior to closing.

In the weeks and days leading up to closing, the loan officer will monitor your finances and alert you if you aren't going to have the cash available to close. If you need a small loan to cover a shortage, they will help you understand what your options are, from a personal loan to a bridge loan. 

Before closing, you'll also have time to review the closing costs as outlined in a Closing Disclosure. Compare it to the loan estimate you received, and make sure that it factors your down payment for earnest money deposits, the correct interest rate, and any credits offered by the seller. Be sure that you check the amount you're required to bring to closing.

Once you're sure that the calculations are correct, work with the bank to get your payment ready. These costs will be paid at closing. You can offer a certified check, cashier's check, or arrange a scheduled wire transfer. In some areas, buyers can use personal checks or credit/debit cards. But they are not as secure and not as readily accepted.

<h3>10. Close & Move-In</h3>
When the day of closing arrives, you'll meet with your real estate attorney or closing agent to complete the paperwork. They'll walk you through the terms of the agreement, accept any payments that you are required to deliver, and have you sign and date on so many lines, you simply won't believe it. Prepare for the closing process to take one to two hours.

At that point, the real estate attorney will give you the keys to your new house. That home is officially yours!

Assuming that your closing was simple and the previous owners have already moved out of the space, you can safely pack that moving truck and relocate your belongings into your new home. 

Buying a home is not simple, and it's an accomplishment you should celebrate. Congratulations! 
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

From getting a mortgage to getting the keys, we walk you through all the major steps of buying a house.

Steps to Buying a House | Unison® Home Equity Sharing

Buying your first home is an exciting time packed with fun decisions and new experiences. Our homebuyer glossary is here to help you feel confident and empowered by defining common real estate terms you’re likely to encounter as you navigate the home buying process. 

 <center><h3>Definitions</h3></center>
 
Escrow – Escrow is the process of using a third party (agent) as a neutral actor in the sale of a home. The escrow agent makes sure that the seller receives the money agreed upon for selling the house and ensures the buyer receives the house in return. Since there are so many moving parts involved in selling a home, the escrow agent is charged with remaining a nonpartisan middleman throughout the process. For instance, when the buyer writes an earnest money check (see below), that check will be given to the escrow agent and not the seller.
 
PMI – Private mortgage insurance is an extra amount paid on top of your mortgage and is generally required if you pay less than 20% of a home’s cost for the down payment, so it should be avoided whenever possible. This insurance favors the bank, not the homeowner, and is meant to alleviate the risk of the bank lending you more than 80% of the home’s price.
 
Earnest money – Earnest money is a sum (usually between 1%–5% of the home’s cost) paid from the buyer to the seller and held by the escrow company that represents the buyer’s serious intention to buy the home. Once earnest money has been paid, the buyer has a set amount of time to obtain financing for the home and handle other necessary tasks (perform an inspection, get an appraisal, etc.). If the deadline for obtaining financing is not met or if the buyer backs out of the sale, the earnest money will likely not be returned to the prospective buyer. If, however, the sale proceeds successfully, the earnest money will be rolled into the closing costs or down payment.
 
Fixed interest – If your home loan has a fixed interest rate, it means that the interest rate of the loan will never fluctuate. If you sign your loan at 3.8%, it will remain there for the duration of the loan.
 
Adjustable Rate Mortgage – An ARM loan means that the interest rate of your home loan will fluctuate with the market at predefined intervals (for example, annually). This is great if interest rates decrease, but it could become a problem if interest rates increase because your monthly mortgage payment will also increase.
 
Closing costs – Closing costs include a variety of fees paid for completing the purchase of a home, such as taxes, title insurance, homeowner insurance, and title search. Closing costs are normally 2%–5% of the total loan amount.
 
Down payment – A down payment is a portion of the total home price paid up front in one lump sum of cash. The higher the down payment, the smaller the amount of loan needed to pay for the remainder of the home’s cost. The recommended amount of down payment is 20%; this will allow you to qualify for the best loan rates and avoid having to pay PMI.
 
Home Equity Sharing – Due to rising housing prices, it may take a long time to save up the suggested 20% down payment to purchase a home. A home equity sharing company pitches in to help with the down payment. For instance, if a home buyer has 10% of the home’s cost for a down payment, a home equity sharing company will contribute the remaining 10%. At the end of the term, typically when the home is sold, the home equity sharing company will receive an amount equal to its original investment and a portion of the appreciated value of a home. If the home has depreciated in value, the home equity sharing company may also share in the loss of value. Home equity sharing agreements are also available to homeowners looking to tap into their existing equity.
 
Broker – Brokers represent sellers and buyers of real estate. Brokers who work with buyers look for their clients’ dream home and assist with the buying process. Brokers who work with sellers determine the market value of the home, show the property, and help with other aspects of selling the home. Brokers normally have real estate agents working for them.
 
Real estate agent – A real estate agent is also commonly referred to as a “realtor,” and these agents work for a broker. They’re qualified to facilitate real estate transactions, and your realtor will be the one showing you homes and being your advocate throughout the homebuying process.
 
Home inspection – It may look like your dream home, but without a home inspection, it might actually be a nightmare. A home inspection is conducted on behalf of the buyer during the homebuying process. During an inspection, the inspector will investigate the condition of the home, from the plumbing and electrical systems to the foundation. The inspector will then provide a full home inspector’s report that details the findings.
 
Title – A title is the ownership document for a home. It’s similar to the “pink slip” showing ownership of a car.
 
Appraisal – An appraisal is a report estimating the value of the property, which may factor in how much similar properties have recently sold for . A home with an updated kitchen, for instance, will be appraised higher than an identical home in the same neighborhood with an older kitchen.
 
Lien – A lien is a legal right to someone else’s property. When you’re buying a house, you’ll need to make sure no money is owed on the property by the previous owner.
 
Closing – The closing is a meeting where all final documents involved in the purchase of the home are signed. During this meeting, the buyer will pay closing costs and the down payment.
 
Contingencies – Contingencies are conditions that must be met to successfully finalize the home purchase. The sale may be contingent upon a roof being replaced or the home being appraised at the sale price, for instance.
 
Equity – Equity refers to the portion of the home’s value that belongs to the homeowner, rather than the bank. In a purchase, it will generally equal the amount of the down payment.
 
Annual Percentage Rate – The cost of borrowing money for your home is the Annual Percentage Rate. APR considers interest as well as other finance changes associated with the loan. It is designed to help consumers compare the costs of different loan options.
 
Offer – This is the amount of money offered for a home by a prospective buyer. If, for instance, a home is listed for $200,000, a prospective buyer may offer $180,000. It is up to the seller to then accept or reject the offer. A stronger offer may include fewer contingencies (see above) or a higher down payment.
 
Mortgage Payment – A mortgage payment is the monthly amount you’ll pay for your home. It’s similar to paying rent, but the amount paid includes both the interest on the home loan and the principal (actual loan amount). It may also include amounts for monthly taxes and insurance depending on the lender.
 
Pre-approval letter – Before beginning the home search, a buyer should consider obtaining an estimate of how much a bank will lend them. The bank will determine how much it is willing to lend based on criteria such as income and credit.
 
There are several other words and phrases you’ll encounter as you buy your first home, but these terms are the most common. If you’re ever confused about anything during your home buying journey, just ask your realtor: he or she is there to help.

 The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Find out what every first-time home buyer needs to know

First-Time Homebuyers Guide | Unison® Home Equity Sharing

Private mortgage insurance, or PMI, is a type of mortgage insurance many home buyers pay when they purchase real estate with a conventional loan.

However, there are ways to <a href="https://www.unison.com/article/how-to-avoid-pmi-when-buying-home">avoid PMI</a> or lessen the length of time you pay into private mortgage insurance. 
<h5>Save for a 20% down payment</h5>
If you have enough time, start saving to secure that down payment. Knowing that you don’t have to pay for PMI will help out tremendously in estimating your upfront costs. 

<h5>Pay extra mortgage payments upfront</h5>
If you can pay additional mortgage payments and increase the stake in your home, you will increase your percent equity and meet the 20% more quickly. Once you hit that threshold, you can request your mortgage lender to cancel your PMI. 
<h5>Refinance</h5>
After a few years of payments on your original loan, you may be able to refinance and remove your PMI payments. With a refinancing, you will use your home’s current value rather than the original value and purchase price. This takes into account the movement in the market and any home equity you may have already put into the home, which may eliminate your PMI payments completely. 
<h5>Get a new appraisal</h5>
Get a fresh appraisal of the value of your home. Your property value could increase, say, if it's been a hot housing market where you live. This could mean your home's value no longer necessitates a PMI monthly payment. Talk with your lender.
<h5>Cancel your PMI once you hit 78% </h5>
The Homeowners Protection Act of 1998 requires lenders to automatically terminate PMI once the homeowner reaches a 78% loan-to-value ratio (LTV). This is based on the lesser of the purchase price or the original appraised value from the date of purchase or refinance.
<h3>About private mortgage insurance and FHA </h3>
A Federal Housing Administration Loan (FHA) is a mortgage issued by an approved lender and insured by the Federal Housing Administration. These loans are designed for those who may not have a 20% <a href="https://www.unison.com/article/down-payment-guide-for-first-time-home-buyers">down payment</a> or good credit history that is a major requirement for conventional loans. 
 
An FHA loan does not require PMI payments. PMI is a type of insurance that is used solely for conventional home loans that are backed by private investors, not insured by the federal government, like FHA loans. 
 
However, an FHA loan requires an additional payment called upfront mortgage insurance (UFMI). Like PMI, the UFMI is a premium fee that is collected when purchasing a new home. 
 
When using an FHA loan, the UFMI is collected by the Federal Housing Administration (FHA) at the time the original loan is made. While similar and often confused for a PMI, the UFMI is a one-time fee that is collected at the beginning of the loan, unlike the PMI, which is paid monthly. 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Five ways to cancel or reduce your PMI payments on a new home.

How to Get Rid of PMI | Unison

HomeOwner Agreements are structured as Option Contracts. This is the legal framework that allows us to give you long-term cash without monthly payments or interest. An option contract gives the buyer of the option the right to buy a specific asset at a later date at an agreed upon price. In short, Unison makes its Initial Payment to you in exchange for the option to buy a portion of your property in the future at a price that we agree on up front. But we have no desire to co-own your home. We can exercise our option only when our Agreement ends, and solely for the purpose of terminating the relationship and settling the obligation you have to Unison. 

Most of our educational materials use a simplified method to calculate Unison's payment when the Agreement ends. The option math works a little differently, but note that both calculation methods will always produce the same results. The example below illustrates this by comparing the simplified math to the option math. 


<a href="https://contentimages.o-prod.unison.com/images/pkr/option_math_jan_2023.png"><img src="https://contentimages.o-prod.unison.com/images/pkr/option_math_jan_2023.png" border="0" alt="Click to enlarge" />
 Click to enlarge image.</a>
 

<h2 class="headline headline--medium">Breakdown: Option Contract Scenario</h2>

At the beginning, Unison purchases an option to buy 40% of your home, which is worth $400,000, in two payments – one now, at $40,000, and one at future exercise, at $116,000. In the future, you sell your home for $490,000. 

A title company will typically handle the finances for you, and will process several transactions simultaneously. In one of those transactions, Unison will exercise its option to purchase 40% of your home by paying the title company the second installment payment of $116,000. In another transaction, they will pay us our “share” in the sale of the home (40% of $490,000, equaling $196,000). But, since the transactions are simultaneous, they simply deduct one from the other: $196,000 – $116,000 = where we arrive at one payment to Unison of $80,000. 

Note: The net return to Unison at the end of our agreement together is the same as the simplified, non-option math that shows accessing $40,000 from a home that increases in value from $390,000 to $490,000 will result in a net payment to Unison of $80,000 at sale. 

So, the option math is more complicated, but the title company will manage that part. If you focus on the simple math from before, it will do the same job of keeping you on the right page. 

Remember: You decide when the option contract ends. Unison cannot exercise our option until you make the decision to buy us out early, sell your home, reach the 30 year max term, or if you materially default on your mortgage. Read more about the different ways that our agreement ends later in the section Ending Your Unison HomeOwner Agreement. 

 

<h2 class="headline headline--medium">Some Situations</h2>

The Option Contract means we have incentives to work with you through difficult circumstances (foreclosure, damage to the house, etc). Because we want your home to be worth as much as possible (just like you do), we can wait until circumstances have improved and you’re ready to sell. This makes the relationship set up by the option contract different, but in a good way. 

<h2 class="headline headline--small">Option exercise and Orderly Sale</h2>

Unison can choose to offer the homeowner a remedy of Orderly Sale in lieu of the foreclosure proceeding, by offering to cure the circumstance of default. The homeowner will have the right to accept or reject this offer. Should the homeowner accept the offer, Unison will make one or more Protective Advances to cure the homeowner’s default, and the homeowner will give Unison the right to market and sell the property in an orderly sale in the customary manner in its local market. Option Exercise and Orderly Sale is designed to prevent the home from becoming a “distressed” property and going to foreclosure, which preserves the market value of the property, and the value of both the homeowner’s and Unison’s equity interest in the property. Following the Orderly Sale, the homeowner and Unison will share the proceeds according to the provisions of the Unison HomeOwner Agreement. 

<h2 class="headline headline--small">Deferred Maintenance Adjustments</h2>

We trust you’ll take care of your home – but in the event you don’t? 


Prior to signing an Agreement with Unison, we typically require a home inspection. While many inspections don’t reveal anything new (maybe a lost sock?), they sometimes uncover defects or conditions that can affect the property value if not addressed. For example, an inspection might reveal significant rot in the framing under the home’s main living area. An issue like this may worsen over time, thus negatively impacting the property’s future value and desirability. 

If a significant issue(s) is found during the inspection, Unison may make note of it in a Deferred Maintenance Addendum. Ideally, the homeowner will arrange for the necessary repairs to be made. However, if the homeowner doesn’t, Unison reserves the right to treat the issue as a Deferred Maintenance Adjustment scenario in the future. Note: You will always be notified if this Addendum is part of your original Agreement. 

<h2 class="headline headline--small">Special Termination</h2>
At any time during your agreement, you can choose to terminate your relationship with Unison. An appraisal will take place, and you'll be responsible for the initial amount given to you by Unison, as well as the Investor Percentage (our share of the change in value) of any increase in value as determined by that appraisal. Also, Unison does not share in any downside in the case of a Special Termination.
 

 

<h2 class="headline headline--medium">Our consumer contract set</h2>

To do a deep dive into the HomeOwner Agreement itself, we recommend you give it a read. Your Program Specialist will be happy to provide you with a copy of any of the below prior to closing your deal. Here is a summary of each contract that comprises the HomeOwner Agreement: 

<h2 class="headline headline--small">Option Agreement</h2>

This contains the basic financial terms of the Unison HomeOwner Agreement and describes in further detail how this particular Option Contract works. 

<h2 class="headline headline--small">Covenant Agreement</h2>

This outlines your rights and responsibilities under the Unison HomeOwner Agreement, as well as the various ways the Agreement can come to an end. It also documents the legal protections available to both you and Unison. 

<h2 class="headline headline--small">Security Instrument</h2>

This document creates a secured lien on the home during the term with Unison and says the lien will be recorded in the jurisdiction where the property is located. It also discusses the fact that the Security Instrument is typically subordinated to any existing mortgage on your property. 

<h2 class="headline headline--small">Memorandum</h2>

This document highlights specific features of the Agreement for public notice and is also recorded on the property. 

 

<h2 class="headline headline--medium">Fees</h2>

There is a one-time transaction fee equaling 3.0% of the equity sharing agreement due to Unison at closing, which is deducted from the proceeds you receive. You are also responsible for third-party costs such as appraisal and settlement costs (includes title, state taxes, and recording fees). The third-party costs will be disclosed to you prior to closing, and deducted from your proceeds.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Unison agreements are structured as option contracts, which allows you to sell us a future option for cash today. But it's important to learn about option contracts and understand the details!

How Option Contracts Work | Unison® Home Equity Sharing

Ready to bring our partnership to an end? There are four ways in which your Unison greement can come to a close.
 
<h4>Sell your home</h4>
 

<img width="100%" src="//images.ctfassets.net/qppku9ygnsbb/2WBooPseIM2Gzc8SDyhPHV/00b7dc4130845277dc3f60a5d371a716/pexels-alena-darmel-7641828_1.png">

 
You’re allowed to sell your home, which ends your Unison agreement, at any time. Keep in mind that if you sell your home before the 5-year milestone, Unison does not share in any decline in value. 
When your home sells, the amount owed to Unison will be based on the Ending Agreed Value of your home - typically determined by the open market sale price. This does not include any closing costs, seller concessions, taxes, or other expenses incurred while selling the home.
 

<h4>Special Termination</h4>
 

<img width="100%" src="//images.ctfassets.net/qppku9ygnsbb/3YnfP4221b26IyspUhqoHt/147a699f8f3426e90d150acf871c97b1/pexels-kindel-media-7979418_1.png">

 
Equity sharing agreements that originated after February 13, 2023 are eligible to Special Terminate at any time. All agreements that originated prior to this date must adhere to the Special Termination restriction period outlined in their individual agreements. If you are a current Unison homeowner with questions about your specific Special Termination guidelines, please reach out to our Home Partnership Team by calling 800-330-5800. If your agreement was originated after February 13, 2023 and you choose to Special Terminate the agreement without selling your home, we will use a third-party appraisal to establish the Ending Agreed Value. The process is similar to selling your home, except we will use the appraised value instead of a sale price - since you’re not selling. The main difference with a Special Termination is that Unison does not share in any decrease of value. This means that the Ending Agreed Value for your property will be at least equal to the Original Appraised Property Value, even if your property value has decreased since the start of your agreement. Thus, at a minimum, you’ll have to pay the Initial Payment (together with any amounts attributed to the Risk Adjustment).
 

<h4>After 30 years</h4>
 

<img width="100%" src="//images.ctfassets.net/qppku9ygnsbb/66mFH9kouj2pmG7cB9twYM/7ab40777063a2b24861b04d6403ed58a/pexels-kampus-production-8815826_1.png">

 
If 30 years have passed, and you haven’t otherwise ended the agreement, you’ll have two options for terminating the agreement at the 30-year mark. You can Special Terminate (buy out) or sell your home. Since our interests are aligned in either case, we will always try to work with you to help you receive as much value from your home as possible.
 

<h4>The last signatory passes away</h4>
 

<img width="100%" src="//images.ctfassets.net/qppku9ygnsbb/4R6iXah7GS1Vwrpi6yfxB1/17fe009702454fe54731265556102590/pexels-timur-weber-8559992_1.png">

 
In the case that everyone on the agreement has passed away, Unison will work with the estate or heirs to conclude the agreement, by either selling the property or paying Unison the value of our interest in the home. It’s important to discuss your Unison agreement with members of your family who may be impacted, as well as anyone living in the house who is not a signatory to the agreement, as they may not be able to remain in the house in the event that the home is sold.
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Ready to bring our partnership to an end? There are four ways in which your Unison Agreement can come to a close.

Ending Your Unison Agreement | Unison® Home Equity Sharing

Cash-out refinancing and reverse mortgages are two of the best ways to leverage your home equity. With them, you can tap into untouched cash and put it towards unexpected life events, major purchases, retirement planning, and more. Not sure which option is the better fit for your needs? Learn the differences between a cash-out refinance and reverse mortgage to help you decide which home lending solution is right for you. 

<ul>
<li><a href="#WhatisCashOutReFi">What Is a Cash-Out Refinance?</a>
<li><a href="#WhatisReverseMort">What Is a Reverse Mortgage?</a>
<li><a href="#cashoutrefi+reversemsim">Similarities Between Cash-Out Refinancing & Reverse Mortgages</a>
<li><a href="#cashoutrefi+reversemdiff">Differences Between a Cash-Out ReFi vs Reverse Mortgage</a>
<li><a href="#cashoutrefiORreversem">Should I Cash-Out Refinance or Apply for a Reverse Mortgage?</a>
<li><a href="#homeequityalt">A Unique Home Equity Alternative</a>
<a id="WhatisCashOutReFi"><h2>What Is a Cash-Out Refinance?</h2></a>
A cash-out refinance is a <a href="https://www.unison.com/blog/refinancing_tips/">low-stress refinancing strategy</a>in which homeowners replace their existing mortgage with a new, larger one. As part of the <a href="https://www.unison.com/blog/how-long-to-get-cash-out-refinance/">cash-out refi process</a>, you'll receive a cash payment that reflects the difference between the two loan amounts, which you can then use to alleviate any pressing financial needs. 
In order to qualify for a cash-out refinance, you typically must have at least 20% equity in your home, a stable income, and a good credit score, though these requirements will vary from lender to lender. 
<h3>Pros of Cash-Out ReFi</h3> 
It's important to consider the <a href="https://www.unison.com/blog/cash-out-refinance-pros-and-cons/">pros and cons of cash-out refinancing</a>, which include: 
<ul>
<li>Lower Interest Rates: If current mortgage interest rates are lower than the rate you're paying for your existing mortgage, a cash-out refi could secure lower monthly payments for you.
<li>Tax Deductions: You may be eligible for tax deductions on the interest you pay on your cash-out refinance.
<li>Stable Loan Terms: 30-year fixed-rate mortgages are common for cash-out refinances, which come with repayment terms that do not vary from month to month.
</ul> 
<h3>Cons of Cash-Out ReFi</h3> 
<ul>
<li>Additional Costs: Closing costs, such as application fees and appraisal fees, will add to the overall cost of cash-out refinancing.
<li>Foreclosure Risk: If you are unable or fail to make your new mortgage payments, you could enter foreclosure and put your home ownership at risk.
<li>Decreased Home Equity: Taking out a cash-out refi erases the equity you've built up in your home and could limit your ability to benefit from property appreciation in the future. </ul>
<a id="WhatisReverseMort"><h2>What Is a Reverse Mortgage?</h2></a>
A <a href="https://www.unison.com/blog/reverse-mortgage-payments-costs/">reverse mortgage</a> is a tax-free home loan that allows homeowners over the age of 62 to convert a portion of their home equity into cash. A reverse mortgage is unique in that it involves lenders making payments to the borrower, as opposed to a conventional mortgage where borrowers pay the lender. 
For you to be eligible for a reverse mortgage loan, your home must be your primary residence (not be a rental property, investment property, or vacation home). Additionally, you must either own your home or have built up a substantial amount of equity in it. Keep in mind that reverse mortgage requirements may vary depending on whether you have a <a href="https://www.benefits.gov/benefit/709">home equity conversion mortgage</a> (HECM) or a proprietary reverse mortgage provided by a private lender. 
<h3>Pros of Reverse Mortgages</h3>
There are many <a href="https://www.unison.com/blog/reverse-mortgage-pros-and-cons/">pros and cons of reverse mortgages</a>, including: 

<ul>
<li>Financial Stability: The payments you receive from your reverse mortgage can be used to pay off your existing home loan, or as a cushion to support your income and savings.
<li>No Income Taxes: Because the money you receive through your reverse mortgage is not considered income, you're not required to pay taxes on any cash you obtain.
<li>Multiple Payment Methods: Receive funds in a way that suits your financial situation, with payment options including a lump sum, monthly payments, and a line of credit.
<li>Retain Home: Tap into the equity you've built in your home while continuing to live in it.
<li>Secure Against Market Fluctuations: You won't be liable for any more than the home's appraised value when the loan is due for repayment, even if the housing market experiences a downturn.
</ul> 
<h3>Cons of Reverse Mortgages</h3>
<li>Potential for Foreclosure: If you were to miss payments or fall behind on maintenance fees, property taxes, or other costs for the upkeep of your home, there is a greater risk of losing your home.
<li>Reduced Home Equity: The equity that you own in your home decreases as your reverse mortgage loan balance grows over time.
<li>Additional Expenses: A reverse mortgage comes with extra expenses, like monthly servicing fees, attorney services, origination and closing costs, and more.
<li>Effect on Government Benefits: Eligibility for government benefits such as Medicaid and supplemental security income (SSI) may be impacted by a reverse mortgage.
<li>Complicated Terms: Though borrowers experience support and counseling, reverse mortgages are long-term commitments that can be hard to understand and navigate.
</ul>
<a id="cashoutrefi+reversemsim"><h2>Similarities Between Cash-Out Refinancing & Reverse Mortgages</h2></a> 
Cash-out refinancing and reverse mortgages share a handful of similarities as financial solutions. Most notably, both involve using your home as leverage to access funds based on the equity you've accumulated. With either option, this requires you to restructure your existing mortgage and has the potential to impact home ownership. In addition, cash-out refi and reverse mortgages are similar in that they offer tax deductions. Both options may also involve additional fees, like closing costs and other expenses. 
<a id="cashoutrefi+reversemdiff"><h2>Differences Between a Cash-Out ReFi vs Reverse Mortgage</h2></a>
Despite their similarities, cash-out refinancing and reverse mortgages do have key differences. A cash-out refi works more like a traditional mortgage, where a homeowner makes monthly payments on the loan. While cash-out refinancing is an option available to a wide range of homeowners, reverse mortgages are designed specifically for people ages 62 and older. With a reverse mortgage loan, home equity is converted into cash without the need to make monthly payments and is instead repaid when the homeowner no longer occupies the property. 
<h3>Requirements</h3>
<ul>
<li>Cash-Out Refinance: You must have a good credit score, reliable means of income, and at least 20% equity in your home.
<li>Reverse Mortgage: You must own your home or have a significant amount of equity in it, and be at least 62 years old.
</ul> 
<h3>Disbursement</h3>
<ul>
<li>Cash-Out Refinance: You will receive a single lump-sum payment.
<li>Reverse Mortgage: You can receive a lump sum, a line of credit, monthly payments, or a combination of these options.
</ul> 
<h3>Repayment</h3>
<li>Cash-Out Refinance: You will make monthly payments over an agreed-upon loan term.
<li>Reverse Mortgage: You are not required to make fixed or monthly payments during the life of the loan. Instead, the loan is usually repaid in full or refinanced when you sell your home or pass away. 
<a id="cashoutrefiORreversem"><h2>Should I Cash-Out Refinance or Apply for a Reverse Mortgage?</h2></a>
Choosing between a cash-out refinance or reverse mortgage can be challenging. In order to determine which option is best for you, take a look at the advantages and disadvantages of each solution and consider which factors align best with your financial goals. 
When considering a cash-out refinance, it's important to ensure you have the ability to take on monthly payments. Current mortgage terms and interest rates can play an equally crucial role in your decision-making. For instance, a cash-out refinancing loan may be a great option if rates are lower than your existing mortgage. 
Eligibility is also worth noting. If you're older than 62 and have a significant amount of equity in your home, a reverse mortgage may be right for you. A cash-out refinance, on the other hand, typically requires a minimum credit score, but is available to a wider age range. 
<a id="homeequityalt"><h2>A Unique Home Equity Alternative</h2></a>
If you have hesitations about these home lending options, Unison offers alternatives to cash-out refinancing and reverse mortgages that allow you to tap into your home's equity without any added interest, debt, or monthly payments. 
The process is simple. Through an <a href="https://www.unison.com/blog/equity-sharing-agreements/"> equity sharing agreement</a>, Unison converts up to 15% of your home's value to cash without creating more of a financial burden. You maintain complete ownership of your home and can use the cash to pay off debts, save for retirement, or spend it how you need. 
Throughout the 30-year term, you have the option to <a href="https://www.unison.com/blog/process-termination/">buy Unison out</a> or settle the home equity sharing agreement when selling your home. If the value of your house increases, Unison shares in the profits. If your home's value decreases, we share in the loss. 
Discover how much home equity you can access with a <a href="https://estimate.unison.com">free estimate</a> today. 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Ready to tap into your home equity but wondering if a cash-out refi or reverse mortgage is better for you? Compare your options in this guide with Unison.

Cash-Out Refinance vs. Reverse Mortgage | Unison 

We’re only human—sometimes we miss our bill due dates, possibly get charged a late fee, and then are more careful to pay it on time the next month. But what happens if you’re delinquent in paying something big, like your mortgage? 

While foreclosure is always a possibility if you’re really late on a mortgage payment, how long does that take? If you’re just a few days late, will that affect your credit score at all? 

Let’s go over what happens when you’re late on your mortgage, and how to avoid it all costs.
 

<h2>When Is My Mortgage Payment Late?</h2>

Just like a rent payment, your mortgage payment is due on the first of every month. But what exactly happens if you pay your mortgage after the due date? Should you expect a late fee, for example? Although penalties may vary between lenders, here is a rough outline of what you might expect in this scenario: 

<h3>One Day Late</h3>
Most lenders offer a grace period–a specified number of days after the initial due date during which you will not be charged a late fee. And while a lender is unlikely to report you to the credit bureau for a single day’s tardiness, it’s not entirely out of the realm of possibility. That said, a single one-day late payment might not have a significant impact on your credit score. 

<h3> 15 Days Late</h3>
The abovementioned “grace period” is usually 15 days–but check with your specific lender to be sure this is the case for you! So what happens when your payment falls outside this window? At this point, your lender is likely going to charge you a late fee–usually a percentage of the overdue amount. They may also report the late payment to the credit bureaus, and a 15-day late payment can have a negative impact on your credit score for up to seven years, affecting your ability to obtain credit in the future. 

<h3>One Month Late</h3>
If your payment is one month late, you can definitely expect to pay a late fee. That fee, as described above, is often a percentage of the overdue amount. Bear in mind that at this point, you will be paying the overdue amount, the late fee, and the amount that is due for that month, too. You must be sure not to fall even further behind. It’s also more likely that the lateness will be relayed to the credit bureaus, and your credit score will suffer. Your lender may start to send more formal notices your way, such as letters or phone calls to inform you of the overdue amount and the potential consequences if you do not bring the loan current. It’s a good idea to see whether the lender may be willing to work with you on a repayment plan, loan modification, or other solutions to help you catch up on the missed payment and prevent further consequences.
 

<h3>Two Months Late</h3>
After two months, you can expect not only the late fees and the punch to your credit, but your lender is likely to take more serious actions. Being two months late is a clear indicator of financial distress; you may receive formal pre-foreclosure notices. While being two months late does not automatically lead to foreclosure, it is a significant red flag. Continued delinquency can lead to foreclosure proceedings if you cannot catch up on your payments. As suggested above, you should communicate with your lender to see whether there are any options regarding a repayment plan or loan modification. You may also want to speak with a financial counselor via a legal aid organization. 

<h3>Three Months Late</h3>
If you’re three months late on your mortgage payments, you will find that you incur each of the consequences from being two months late: late fees, credit damage, and stern, formal communiqués from your lender, who will almost certainly initiate the pre-foreclosure process. While being three months late does not automatically lead to foreclosure itself, the severe situation will put you on this path if you continue to miss payments. 

<h3>Four Months Late</h3>
At this stage, the situation is extremely serious. It’s critical to address it as soon as possible, as ignoring the problem can lead to severe consequences, including the potential loss of your home through foreclosure! You will have mounting late fees and damage to your credit score; your lender has likely initiated pre-foreclosure proceedings. If you have not reached out to communicate your difficulties with them, now is the time. If you don’t, you will find yourself beyond the point of no return, and you may very well lose your home. 

<h2> What Are the Consequences of a Late Mortgage Payment?</h2>

<h3>Late Fees & Penalties</h3>
Mortgage late fees are typically calculated based on a percentage of your overdue payment amount and are governed by the terms and conditions outlined in your mortgage contract. The specific calculation can vary from one lender to another, but common late fee percentages are around 4% to 5% of the overdue amount.
 
Be aware that some states have regulations that limit the amount of late fees a lender can charge or specify how they should be calculated. These regulations can vary widely, so check your state's laws if you're concerned about excessive fees. 

<h3>Negative Impact on Credit Score</h3>
As previously mentioned, failure to make mortgage payments will have a negative impact on your credit score. Late mortgage payments can lower your credit score; the severity of the impact depends on how late the payments are, and your credit history prior to the missed payments. For example, a single missed payment can lower your score by as much as 100 points or more, if your credit history is already less-than-stellar. 

Late mortgage payments can linger on your credit report for up to seven years, potentially years after you’ve already caught up. You could really struggle to secure credit cards, auto loans, or other types of financing during this time. Even when you do qualify for credit, you may receive less favorable terms and higher interest rates because lenders may view you as a higher-risk borrower. Even some landlords or potential employers will run your credit before offering you a lease or a job. 

<h3>Risk of Foreclosure</h3>
Foreclosure is the legal process through which a lender sells ownership of your home due to nonpayment of the mortgage. As we describe above, you are extremely unlikely to risk foreclosure by making a single late payment. However, the risk of foreclosure generally becomes more substantial as the number of missed payments increases. 

Each mortgage lender may have different policies and timelines for initiating foreclosure proceedings. Some lenders may start the process after several months of missed payments, while others may be more lenient or flexible. You should always be in communication with your lender if you start to miss more than one payment, regardless of perceived leniency. Plus, many lenders offer loss mitigation options to help homeowners avoid foreclosure, such as loan modification, forbearance, repayment plans, or other arrangements to help you catch up on missed payments. It's essential to contact your lender early, though, to explore these options. 

Moreover, foreclosure laws and timelines vary by state. Some states have longer foreclosure processes with more opportunities for homeowners to rectify the situation, while others have expedited procedures. You should review your state’s regulations, as well as those of your individual lender, in order to fully grasp your specific situation, even if purely hypothetical. 

<h2>How to Avoid Foreclosure After a Late Payment</h2>
Obviously, foreclosure is just about the last thing that you want! So, if you do have to resort to missed or late payments, what can you do to avoid it?
 
<h3>Set up a Mortgage Repayment Plan</h3>

Setting up a mortgage repayment plan involves working with your mortgage lender to establish a structured arrangement for paying back missed payments over time. It’s important that you start communicating with your lender right away when you suspect you may begin to fall behind in your payments; early communication is crucial to preventing further financial consequences! 

Calculate how much you can afford to pay each month to catch up on your missed payments while maintaining your regular, current and upcoming monthly payments. You may need to negotiate with your lender to agree on a plan that fits your budget, perhaps extending the repayment period or spreading the missed payments over several months. Ensure that all agreed-upon terms are documented in writing, including details such as the repayment amount, schedule, interest rates, and any fees. 

<h3>Start Housing Counseling</h3>

One valuable resource you may want to utilize is housing counseling. In general, housing counseling can provide guidance, support, and expert advice on managing mortgage and financial challenges. What does this look like? Housing counselors can assess your current financial situation, including income, expenses, and debts, and help you create a realistic budget to better manage your finances now, and for the long-term. 

 Moreover, because housing counselors are knowledgeable about various foreclosure prevention options, such as loan modifications, forbearance, repayment plans, and refinancing, they can help you explore these options and determine which may best suit your circumstances. They are also a mine of resources and a fount of knowledge, who can help connect you to additional tools and services, as well as provide financial literacy education. 

Housing counselors can also act as mediators and intermediaries between you and your mortgage lender, should you need it. 

Note: It's important to seek assistance from a HUD-approved housing counseling agency or a nonprofit organization with experience in foreclosure prevention. These agencies typically offer their services for free or at a low cost. Be cautious of predatory foreclosure rescue scams and only work with reputable and trustworthy organizations! 

<h3>Apply for Mortgage Forbearance</h3>

Designed to provide short-term relief for homeowners who are facing financial difficulties and are unable to make their regular mortgage payments, mortgage forbearance is a temporary agreement between a homeowner and their mortgage lender that allows the former to temporarily pause or reduce their mortgage payments due to financial hardship. Though payments may be paused or reduced, however, interest on the mortgage continues to accrue–this means that the unpaid interest is added to the mortgage balance. At the end of the forbearance period, the homeowner is responsible for repaying the missed or reduced payments, potentially as lump-sum payments, a repayment plan to catch up on the missed payments, or an extension of the loan term. 

<h3>Negotiate a Mortgage Loan Modification</h3>
A homeowner who is facing financial hardship and having difficulty making their regular mortgage payments can attempt to negotiate a mortgage loan modification with their lender. The primary goal of a loan modification is to reduce the homeowner's monthly mortgage payments, which can be achieved through various means, such as reducing the interest rate, extending the loan term, or potentially even principal forbearance or forgiveness. Unlike mortgage forbearance, which is a temporary relief option, a loan modification represents a permanent change to the mortgage terms. Once the modification is approved and completed, the new terms become a part of the mortgage agreement. 

<h3>Sell Your Home</h3>

Technically, selling your home is one option you can consider to prevent foreclosure. Selling your home can help you pay off your mortgage and any outstanding debts, allowing you to avoid the foreclosure process and its associated consequences. Of course, there are some obvious downsides to this–you will, for example, need to find different living arrangements. You should contact your mortgage lender if you are thinking about this option in order to discuss it in more detail. 

<h3> Prevent Missed Payments in the Future</h3>

If you’re experiencing difficulties making your monthly mortgage payments on time, you should think about the root of the issue. Are you merely forgetful? Are you unable to meet the obligation for financial reasons? If the former is the case, try setting up either reminders or, if you are confident that you won’t need to move money around, automatic payments. However, if you’re not making the payments because you simply don’t have the funds, you should draw up a budget for yourself and consider other forms of financial planning. A financial counselor may be able to help you with these steps and set you on the right track moving forward. 

It might also be beneficial for you to set up a financial safety net from which you can draw funds as needed. A <a href=”https://unison.com”>Unison</a> equity sharing agreement gives you up to 15% of your home’s current value in cash so that you can use it however you want or need–debt consolidation is one popular use among the over 10,000 homeowners who have partnered with Unison thus far. If monthly payments cause you grief, you don’t have to worry; Unison doesn’t require monthly payments! Instead, at the end of your agreement (usually when you sell your home, or 30 years pass), Unison receives an agreed upon percentage of your home’s change in value. Typically, if your home’s value goes down, Unison will even share in that loss. 
 

<h2>Late Mortgage Payment FAQs</h2>

<h3> What happens if I miss more than one mortgage payment?</h3>

If you miss multiple mortgage payments, you run the risk of incurring several compounding late fees, as well as increasingly damaging your credit. In addition, your lender may initiate the pre-foreclosure process, which typically involves sending you formal notices, making phone calls, and notifying you of the overdue amount. These notices are often a warning that your home is at risk of foreclosure. 

<h3>How many payments can I miss before risking foreclosure?</h3>

Technically, there is no fixed number of missed payments that universally triggers foreclosure because the specific timeline and procedures can differ. Several factors–like your mortgage contract, state laws, and your lender's policies–will contribute to the foreclosure timeline. You should contact your mortgage lender to get more information–and to look into options that might help you get back on track without losing your home. 

<h3>Can I negotiate with my lender after missing a payment?</h3>

Yes, you can negotiate with your lender after missing a payment– and in many cases, you absolutely should! Lenders are often willing to work with borrowers who are experiencing temporary financial hardships and want to avoid foreclosure. 

<H3> How will a late mortgage payment affect my credit score?</h3>

In a nutshell: negatively. The degree to which this negative impact will be felt, though, depends on several factors, including how late the payment is, and your previous credit history. Credit reporting typically uses a 30-day delinquency scale, so payments are categorized as 30 days late, 60 days late, 90 days late, and so on. The later the payment, the more damaging the impact on your credit score. It’s also important to remember that late mortgage payments remain on your credit report for up to seven years. 

<h3>Can a missed payment affect my ability to refinance my mortgage?</h3>

Yes, a missed mortgage payment will affect your ability to refinance. When you apply to refinance your existing mortgage, lenders assess your creditworthiness and financial stability. Your payment history and credit score are large components of this evaluation, and missed payments will have a severely negative impact on both.
 

<H3> How does mortgage forbearance work and should I use it?</h3>
Mortgage forbearance is a temporary arrangement between a homeowner and their mortgage lender that allows the homeowner to temporarily pause or reduce their mortgage payments. During the forbearance period, you won't be required to make your full mortgage payments; instead, you'll make reduced payments or no payments, depending on the terms, though interest will continue to accrue. 

Forbearance is meant to provide temporary relief to homeowners experiencing likewise temporary financial hardship, such as job loss, medical expenses, or a sudden financial crisis. That said, if your financial issues are expected to be long-term, it may not be the best solution, as you'll eventually need to repay the missed payments. In that case, you may want to explore other options, such as loan modification, refinancing, or financial assistance programs. 

If you’re looking for a way to extract equity from your home, but hate the idea of adding another monthly payment, consider an <a href="https://www.unison.com/blog/equity-sharing-agreements/">equity sharing agreement</a> from Unison. You can receive up to 15% of your home’s value in cash for a percentage of your home’s future change in value at the end of your agreement. There’s no interest, either! If that sounds good to you, get a <a href="https://estimate.unison.com">free estimate</a> with no obligation or effect on your credit today! 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Worried about late mortgage payment consequences? Missed mortgage payments lower credit and can lead to foreclosure. Here’s what to do if you forget to pay!

What Happens if You Miss a Mortgage Payment? | Unison

It’s no secret that Americans are sitting on an enormous amount of home equity (<a href="https://markets.businessinsider.com/news/commodities/housing-market-homeowners-equity-trillion-lendingtree-house-prices-value-rates-2023-8">nearly $30 trillion</a>!) But sitting is a passive act; you may be wondering whether there’s a way you could make your equity actively work for you. After all, what good is all that accumulating equity if you can’t use it to renovate your home, consolidate your debt, send your child to college, or invest in a new business venture? 

If your thoughts have trended in this direction, your research has likely led you to a number of products that can help you tap into your equity to accomplish such objectives, including the <a href="https://www.unison.com/blog/about-helocs/">Home Equity Line of Credit</a>, or HELOC. In this post, we’ll outline some of the pros and cons to obtaining a HELOC, and help you decide whether it might be a good fit for you. 

<h2>What is a Home Equity Line of Credit?</h2>
A home equity line of credit (HELOC) is a type of loan that enables homeowners to borrow against the equity of their home–in other words, “tap into” it. 

In a HELOC, the lender provides a revolving credit line–much like a credit card–with a maximum limit based on a percentage of the home's appraised value and subtracting the balance of the mortgage. During what is referred to as the “draw period,” which is usually the first 5-10 years of the loan, borrowers can use the line of credit to borrow money as needed, up to the approved limit. Typically, during the draw period, borrowers usually only need to make interest payments on the amount they've borrowed that month. After the draw period ends, the repayment period begins. During this phase (usually 10-20 years), borrowers can no longer borrow money, and they must start repaying the outstanding balance, as well as the interest. 

<a href="https://www.unison.com/blog/how-does-a-heloc-work/">HELOCs</a> are commonly used for home improvements, debt consolidation, education expenses, or other large expenses. 

<h2>Pros of a HELOC</h2>

<ul>
<li><h3>Low Interest Rates:</h3> Generally, HELOCs tend to have lower interest rates compared to other forms of unsecured credit, such as credit cards or personal loans, because the homeowner is staking their home as collateral. This can result in lower borrowing costs for the homeowner overall.
<li><h3>Tax-Deductible Interest:</h3> In some cases, the interest paid on a HELOC may be tax-deductible, especially if the funds are used for home improvements. 
<li><h3>Can Be Used For What You Wish:</h3> Borrowers are not limited to any specific use for HELOC funds, and can use the money for virtually any purpose.
<li><h3>Long Draw & Repayment Period:</h3> If the value of the home increases during the draw period, the homeowner's equity may grow, providing additional borrowing capacity if the borrower needs to access more funds. Plus, the longer repayment period allows borrowers to spread out the repayment of the principal over a more extended period, which might make monthly payments more manageable.
<li><h3>Only Borrow What You Need:</h3> Rather than receiving a lump sum, homeowners merely borrow what they need. This minimizes the interest costs associated with the HELOC, and can lead to smaller monthly payments, allowing you to maintain better control over your financial situation overall.
</ul>

<h2>Cons of a HELOC</h2>

<ul>
<li><h3>Variable Interest:</h3> Many HELOCs have variable interest rates, which means that the interest rate changes with the market conditions. These circumstances can make it difficult to properly budget or plan ahead.
<li><h3>Your Home Is Collateral:</h3> If you fall behind or fail to make payments on your HELOC, you will put your home at risk for foreclosure. 
<li><h3>Lower Home Equity:</h3> When you draw funds from your HELOC, you are essentially using a portion of your home equity. The amount you borrow becomes a debt against your home, which doesn't technically lower your overall equity, but it does reduce the amount of equity that is unencumbered.
<li><h3>Risk of Overspending:</h3> While the flexibility of the HELOC can seem like a perk, homeowners need to possess high levels of self-control not to be tempted to accumulate more debt than they can afford to repay!
<li><h3>Minimum Withdrawals:</h3> Some HELOCs do have minimum withdrawals during the draw period to ensure that the loan remains profitable to the lender. So while you may only need to pay the interest on that which you borrow, you would be forced to borrow a certain amount. 
</ul>

<h2>Should I Get a HELOC?</h2>

While you are the only one who can answer this question, as you know your own situation most intimately, here are some starting points for your consideration. 

A HELOC might be a good idea if:
<ul>
<li>You want to make home improvements or repairs which can potentially increase the value of your home. This would be considered a wise investment.
<li>You have high-interest debt that you want to consolidate, such as credit card balances. HELOCs often have lower interest rates compared to credit cards, so you could save money in the long run.
<li>You need funds for a one-time big expense and have a clear, structured plan for repayment. 
</ul>

 
A HELOC might be a bad idea, however, if:
<ul>
<li>You’re facing financial uncertainty. With a nebulous income, taking on a HELOC could increase your risk of being unable to meet repayment obligations, ultimately resulting in the loss of your home.
<li>You want to use the funds for discretionary or non-essential expenses, such as vacations or luxury purchases. It's generally advisable to reserve a HELOC for more strategic and essential uses, to avoid needless debt.
<li>You have a history of poor spending habits. A HELOC may exacerbate these issues.
</ul>

 

<h2>Alternatives to Home Equity Lines of Credit</h2>
If you want to access your equity, but a HELOC doesn’t appeal to you, there are <a href="https://www.unison.com/blog/best-fit-for-HELOC-and-alternatives/">other solutions</a> you should consider. 

<h3>Home Equity Loan vs. HELOC</h3>
A home equity loan provides a lump sum of money upfront, which is typically repaid in fixed monthly installments over a set period. The HELOC, meanwhile, allows you to withdraw what you need, during which time you simply pay interest on that amount. It is only subsequently during the repayment period that you repay the loan itself as well. 

 

Home equity loans tend to have fixed interest rates, unlike HELOCs, which have variable interest rates that may change throughout the life of the loan. 

<h3>Cash-Out Refinance vs. HELOC</h3>
A <a href="https://www.unison.com/blog/cash-out-refinance-pros-and-cons/">cash-out refinance</a> replaces your existing mortgage with a new one that has a higher loan amount; you receive the difference in cash. You will repay the new mortgage just as you were the previous one, with a monthly payment that chips away at the principal amount, plus fixed interest. 

On the other hand, a HELOC adds an additional monthly payment–first, the interest on that which you borrow during the draw period, and secondly, when you repay the balance (plus interest) during the repayment period. 

<h3>Reverse Mortgage vs. HELOC</h3>
A <a href="https://www.unison.com/blog/reverse-mortgage-pros-and-cons/">reverse mortgage</a> is only available to homeowners who are 62 years or older, and involves the lender paying the homeowner, rather than the other way around. The payments can be made either as a lump sum, fixed monthly payments, a line of credit, or a combination of these. Ultimately, the loan is repaid when you sell the home, move out, or pass away. 

HELOCs, alternatively, have no age requirement attached to them. The homeowner can borrow however much (or little) they like–up to a certain limit–each month during the draw period, and then they repay the loan during the repayment period. 

<h3>Personal Loan vs. HELOC</h3>

With a personal loan, your creditworthiness and income are the primary factors considered for approval. Such loans are also typically unsecured, meaning they do not require collateral. As a result, their interest rates are usually higher, though fixed. 

HELOCs are secured by your home, and that security can procure you lower (though variable) interest rates, and also lead to a higher loan amount. Of course, you are also potentially putting your home at risk. 

<h3> Equity Sharing Agreement vs. HELOC</h3>
In an <a href="https://unison.com/blog/equity-sharing-agreement">equity sharing agreement</a>, such as you can obtain via <a href="https://unison.com">Unison</a>, you receive a percentage of your home’s current value in exchange for a percentage of its future change in value at the end of the agreement. With Unison, you can maintain the agreement for up to 30 years, though you are free to buy out the agreement or sell your home at any time before then. Unison doesn’t demand monthly payments or accrue interest, either. 

In contrast, the HELOC monthly payments vary, depending on whether the homeowner is in the draw period (during which they may merely need to pay interest on that which they’ve borrowed), or the repayment period (during which they repay the principal and interest). And don’t forget–the interest rate is often variable, so the amount due will likely change. 

If you’re looking for a way to tap into your equity, and the stringent monthly payment schedules of traditional loans don’t appeal to you, you should explore Unison’s equity sharing agreements. You can obtain a <a href="https://estimate.unison.com">free estimate</a> today with neither obligation nor effect on your credit score. See why over 10,000 homeowners have used Unison to access their trapped equity to give themselves the gift of financial freedom! 
 


 The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Wondering if you should get a home equity line of credit? HELOCs often have lower interest rates. Review HELOC pros and cons to decide if it's right for you!

Pros and Cons of Home Equity Line of Credit (HELOC) | Unison 

You’ve probably heard of home equity loans, and have a general idea of what they are. But if you’re looking for a way to access your growing home equity and considering your options, a “general idea” isn’t going to cut it. Continue reading to learn more about the pros and cons of home equity loans and start to assess whether one might be a good fit for you. 

<h2>What is a Home Equity Loan?</h2>

A home equity loan is precisely what it sounds like–a loan that a homeowner takes out, using their home equity as collateral. Home equity loans are often referred to as “second mortgages.” 

Unlike personal loans, for example, a home equity loan is a secured loan. It is secured by your home equity, which means that it may have lower interest rates, but also that if you fail to make payments, you could lose your home to foreclosure. 

When you take out a home equity loan, you will typically receive a single lump sum payment, which you will pay back over a fixed term (anywhere from 5-30 years), with a fixed interest rate attached. These factors are in contrast to a home equity line of credit (HELOC), with which you borrow flexibly over a draw period, and which frequently has a variable interest rate that can change with market conditions. 

Homeowners use home equity loans to pay for anything from home renovations to debt consolidation–there are no required uses. 

<h2>Pros of Home Equity Loans</h2>

<ul>
<li><h3>Fixed Interest Rate:</h3> Unlike HELOCs, home equity loans have a fixed interest rate. Throughout the term of the loan, the interest rate will remain the same, which makes it easier for the homeowner to budget and plan accordingly.
<li><h3>Predictable Monthly Payments:</h3> If you thrive most with highly structured arrangements, home equity loans come with a fixed repayment term. This means that, combined with the fixed interest rate, homeowners will know exactly how much each monthly payment will be, and when the loan will be paid off.
<li><h3>Extended Repayment Periods:</h3> A longer repayment period usually results in smaller monthly payments. When you set the terms with your lender, it’s possible to request an extended repayment period–up to 30 years.
<li><h3>Flexible Uses:</h3> While some loans that may have restrictions on how the funds can be used, home equity loan funds can be used for a variety of purposes, providing flexibility to homeowners. 
<li><h3>Tax Advantages:</h3> In some cases, the interest paid on a home equity loan may be tax-deductible, particularly if the funds are used for home improvements. Check recent tax laws, nationally and at the state level, to see what tax benefits are available to you.
</ul>

<h2>Cons of Home Equity Loans</h2>
<ul>
<li><h3> Risk of Foreclosure:</h3> Never forget that a home equity loan is secured by your home! This means that if you cease to make payments, you risk losing your home by foreclosure. 
<li><h3>Higher Lending Criteria:</h3> Like other types of loans, home equity loans often have specific lending criteria that borrowers must meet in order to qualify. The criteria for a home equity loan can vary among lenders, but generally, these loans may have somewhat higher lending standards compared to certain other types of consumer loans.
<li><h3>Higher Interest Rates:</h3>In general, home equity loans often come with higher interest rates compared to primary mortgages or other types of secured loans. One reason for this is that home equity loans are often in the second lien position, meaning they are subordinate to the primary mortgage. Therefore, in the event of foreclosure, the primary mortgage lender gets paid first from the sale proceeds, and the home equity lender receives any remaining funds. This additional risk could be reflected in the interest rate.
<li><h3>Upfront Fees & Closing Costs:</h3> Home equity loans are often accompanied by upfront costs, including application fees, appraisal fees, closing costs, and other charges.
<li><h3> Risk of Overspending:</h3> If you don’t have a set plan for how you want to use the funds, you may spend the money frivolously and end up with debt that outlasts the benefits of the purchases.
<li><h3>Added Debt:</h3> Taking on a home equity loan adds to your overall debt burden. Unless you are using the loan to consolidate other high-interest debt, piling on an extra debt may not be a wise choice.
</ul>

<h2>Should I Get a Home Equity Loan?</h2>

You’re the only one who can ultimately decide whether a home equity loan is a good choice for you and your finances. If you’re weighing your options, though, here are a few factors to consider. 

A home equity loan might be a good idea for you if: 

<ul>
<li>You intend to make home improvements or repairs which can potentially increase the value of your home. Upgrades such as adding a room or remodeling a kitchen can be especially fruitful–and you may be able to deduct the interest on your taxes. 
<li>You have high-interest debt that you want to consolidate, such as credit card balances. Home equity loans can have lower interest rates compared to credit cards or other unsecured loans, so you could save money in the long run.
<li>You have a specific expense with a well-defined cost, such as a major medical procedure or other one-time cost, a home equity loan with a fixed interest rate and predictable monthly payments can provide stability for budgeting.
</ul> 
However, a home equity loan may be a bad idea for you if: 

<ul>
<li>You're in a precarious financial situation with unstable income, high levels of existing debt, or a poor credit history. Taking on additional debt with a home equity loan can only make your situation more dire–and you risk losing your house as well.
<li>You want to fund non-essential or luxury expenses, such as vacations, entertainment, or other discretionary purchases that don’t provide long-term value.
<li>You seek to invest in speculative ventures, such as the stock market or high-risk business ventures. If the investments don’t perform well, you could be putting your home at risk.
<li>The real estate market is experiencing a downturn and property values are declining. In that case, taking out a home equity loan may result in owing more than your home is worth.
</ul>

<h2>Alternatives to Home Equity Loans</h2>

If you want to tap into your equity, but aren’t quite sure whether a home equity loan is the right method, consider comparing it to some of the other solutions available: 

<h3>Home Equity Loan vs. HELOC</h3>
A home equity loan provides a lump sum of money upfront, which is typically repaid in fixed monthly installments over a set period. The <a href="https://www.unison.com/blog/how-does-a-heloc-work/">HELOC</a>, meanwhile, allows you to withdraw what you need, during which time you simply pay interest on that amount. It is only subsequently during the repayment period that you repay the loan itself in addition. <a href="https://www.unison.com/blog/home-equity-loan-heloc-application-approval-process/">HELOC</a> interest rates also tend to be variable, rather than fixed, which is another key difference between the two products. 
<h3>Home Equity Loan vs. Cash-Out Refinance</h3>
In a <a href="https://www.unison.com/blog/cash-out-refinance-pros-and-cons/">cash-out refinance</a>, the homeowner replaces their existing mortgage with a new, larger one. The new mortgage pays off the old one and provides a cash payout for the difference between the two loans. <a href="https://www.unison.com/blog/cash-out-refinance-vs-home-equity-loan">In contrast</a>, a home equity loan is a separate loan in addition to your existing mortgage. 
<h3>Home Equity Loan vs. Reverse Mortgage</h3>
A <a href="https://www.unison.com/blog/reverse-mortgage-pros-and-cons/">reverse mortgage</a> enables homeowners who are age 62 or older to convert a portion of their home equity into cash without selling the home. The loan is repaid (with interest) when the homeowner sells the home, moves out of the home, or passes away; there are therefore, unlike with a home equity loan, no monthly payments. 
<h3>Home Equity Loan vs. Equity Sharing Agreement</h3>
An <a href="https://www.unison.com/blog/equity-sharing-agreements/">equity sharing agreement</a>, such as one with <a href="https://unison.com">Unison</a>, gives the homeowner a portion of their home’s current value in cash. In exchange, instead of the monthly payments and interest charges that home equity and other loans offer, the homeowner will pay them the original amount plus an agreed-upon percentage of the home’s change in value at the end of the agreement (usually the time of sale). 
Unison’s equity sharing agreement empowers homeowners to tap into their equity without needing to add to their retinue of monthly payments, or worry about interest rates. If that sounds promising, you can <a href="https://estimate.unison.com">get a free estimate</a> from Unison’s website with absolutely no obligation, or effect on your credit. 

 
 
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Wondering if you should apply for a home equity loan? Before you borrow, understand the home equity loan pros and cons to decide if one is right for you!

 Pros and Cons of Home Equity Loan| Unison

For those who are at least 62 years old, taking out a <a href="http://unison.com/blog/reverse-mortgage-pros-and-cons/" target="_blank">reverse mortgage</a> is one way to supplement your income in your retirement years. As long as you live in the home and have a decent amount of home equity, you are likely to be eligible. However, these programs can be complicated and are not right for everyone. That’s why you should understand all the details before you make a decision.

Below, we explain how a reverse mortgage works, including how much it pays and how much it costs.


<h2>What is a Reverse Mortgage?</h2>
A reverse mortgage is a type of home loan that allows homeowners to convert part of their home equity into cash without needing to sell the property. As the name itself suggests, a reverse mortgage is like a regular mortgage, only, the payments are in “reverse.” The lender makes regular monthly payments to the homeowner, rather than the other way around. 

<h2>How Does a Reverse Mortgage Work?</h2>

As we’ve mentioned, reverse mortgages are primarily designed for homeowners over the age of 62 who have built up a significant amount of equity in their homes. If this is the case for you, you may want to learn more about the reverse mortgage process, and the various payout options. 

<h3>Reverse Mortgage Process</h3>
<ol>
<li>Homeowner Research + Education: Like with any big decision that you make, it’s imperative that you perform research and weigh your options when it comes to choosing a reverse mortgage. Familiarize yourself with the risks, benefits, and criteria (you’re reading this blog, so you’ve already started to do this!). If your reverse mortgage is an HECM backed by the federal government (FHA), you will be required to undertake reverse mortgage counseling with a counselor who has been approved by the Department of Housing and Urban Development. 
<li>Application: After comparing multiple lenders, fill out the application for your top choice. The application will include details about both your property and your personal financial profile.
<li>Appraisal: The lender will require a professional appraisal of your home, in order to determine its current value. The current market value is used to calculate the loan amount for which you are eligible.
<li>Loan Underwriting and Processing: The lender will review your application and documents. At this stage, they may request additional documents, so to cut down on the time the processing will take, it is best to be prepared. It is at this time that the lender will also perform credit checks and other assessments of your financial profile in order to determine whether you are able to keep up with monthly payments and meet your obligations.
<li>Approval and Closing: Once your application is approved, the lender will send you a Loan Estimate that lays out the terms and various costs of the reverse mortgage. At this point, you will undergo a mandated waiting period (usually three days) during which you are meant to scrutinize the agreement and ask any questions that you have. If you decide to proceed, you will schedule a closing date on which you will sign the agreement.
<li>Disbursement of Funds: Once you’ve closed on the reverse mortgage, you will need to decide how you want to receive the loan proceeds, which can be in the form of a lump sum, monthly payments, a line of credit, or a combination of these options. It’s worth noting that the lump sum option has a fixed interest rate attached, while the other choices utilize variable interest rates. And while you can switch disbursement methods during the term of the reverse mortgage without refinancing between the variable interest rate options, you can’t switch to the fixed rate lump sum. 
<li>Loan Repayment: As long as you remain living in the home and continue to meet loan requirements such as paying property taxes and insurance costs, you won’t need to make any monthly payments. The loan becomes due when you either move, sell the home, or pass away. In the first two cases, you will repay the loan using proceeds from its sale, or other funds; in the latter scenario, your heirs will need to do so.</ol>
 
<h3>How Does Your Payment Method Determine How Much You’ll Get Paid?</h3>
On the surface, it doesn’t seem like the payment method would affect how much you can get. However, getting paid out in one lump sum versus monthly payments could affect the principal amount of your loan.

Getting the entirety of your reverse mortgage amount all at once means you could be giving up some money in the future, whereas both the fixed monthly payment option and the line of credit option could pay out more to you over time if your home value goes up.

<h2>Reverse Mortgage Requirements</h2>
We’ve touched on a few of these already, but be aware that there are several requirements you must meet to qualify for a reverse mortgage.

<ol>
<li>Age: You and any of your co-borrowers (a spouse, for example) need to be at least 62 years of age. The older you are, the more you may be eligible to borrow.
<li>Home Equity: You must own your home outright or have a substantial amount of equity in it. In some cases, if you have an existing mortgage, you may still qualify for a reverse mortgage if the loan balance can be paid off with the reverse mortgage proceeds.
<li>Primary Residence: The property must be your primary residence. In other words, vacation homes and investment properties are not eligible for a reverse mortgage.
<li>Property Type: The property needs to be either a single-family home, or a multi-family property of up to four separate units (one of which you yourself must occupy). Though some condominiums and manufactured homes may also qualify, they must meet specific criteria set by both the lender and the Federal Housing Administration (FHA).
<li>Property Condition: Your home must meet certain standards to qualify. If it is in poor condition, you may be required to make repairs before the lender will work with you.
<li>Financial Assessment: The lender’s assessment of your financial profile will need to determine your ability to meet financial obligations throughout the term of your agreement. In other words, they must find that you are able to pay property taxes as well as keep up with maintenance and insurance costs.
<li>Counseling: If you habe an HECM reverse mortgage, you will need to attend a counseling session with an HUD-approved counselor, who will ensure that you understand the complexities of the reverse mortgage. 
<li>Financial Obligations: This cannot be emphasized enough! You must continue to pay for both property taxes and insurance, as well as any HOA fees. 
</ol> 

Requirements will vary by lender, especially between either a Home Equity Conversion Mortgage (HECM), which is insured by the FHA, or a proprietary reverse mortgage, which is offered by private lenders.

<h2>Types of Reverse Mortgages</h2>
There are three types of reverse mortgages.

<ul>
<li>Home Equity Conversion Mortgage (HECM): The most common and widely-used type of reverse mortgage, the HECM, is insured by the Federal Housing Administration (FHA), and provides certain protections for borrowers. As a result, this type of reverse mortgage has strict requirements regarding age and property type. There are often loan limits enforced that are based on the borrower’s age and the home’s appraised value. 
<li>Proprietary Reverse Mortgage: Also known as “jumbo reverse mortgages,” these reverse mortgages are offered by private lenders and are not insured by the FHA. Compared to HECMs, these loans may have different terms, interest rates, and eligibility requirements, as well as be available to homeowners with higher home values. In addition, proprietary reverse mortgages may also offer more flexible disbursement options, making them a better fit for specific financial situations.
<li>Single-Purpose Reverse Mortgages: Typically offered by state or local government agencies or nonprofit organizations, these loans are designed for specific purposes, such as home repairs and renovations. As such, the funds can only be used for and towards the designated purpose. This type of reverse mortgage frequently has the lowest interest rate of the three. 

<h2>How Much Money Do You Get From a Reverse Mortgage?</h2>

The amount of money you can borrow depends on how much home equity you have available. You typically cannot use more than 80% of your home’s equity based on its appraised value. In 2023, the maximum amount anyone can be paid from a HECM reverse mortgage is <a href="https://reversemortgagedaily.com/articles/reverse-mortgage-lending-limit-rises-above-1m-for-first-time-in-2023/" target="_blank">$1,089,300</a>. However, most people will be paid much less.

The exact amount the reverse mortgage will pay you depends on a few different factors, including your age, the current home value, and your interest rate. The chart below shows how much of a difference these factors can make it determining the amount of equity you can tap into:
 
<center>
<table>
 <tr>
 <th> </th>
 <th>4% interest rate</th>
 <th> </th>
 <th>5% interest rate</th>
 <th> </th>
 <th>6% interest rate</th>
 </tr>
 <tr>
 <td>65 year old borrower</td>
 <td>49%</td>
 <td> </td>
 <td>43%</td>
 <td> </td>
 <td>38%</td>
 </tr>
 <tr>
 <td>90 year old borrower</td>
 <td>69%</td>
 <td> </td>
 <td>65%</td>
 <td> </td>
 <td>62%</td>
 </tr>
</table>
</center> 




<h2>How Much Does a Reverse Mortgage Cost?</h2>
Because a reverse mortgage is a type of loan, there are various costs associated with taking one out. These include interest on the loan, the origination fee, and any set aside fees. Set aside fees include expenses such as getting your home appraised and making any repairs necessary to get your home approved.

An appraisal can cost <a href="https://www.bankrate.com/real-estate/how-much-does-an-appraisal-cost/" target="_blank">anywhere from $250 to $1,000</a> depending on the size of the home and any complications that arise.

Interest rates fluctuate over time but if, for example, your rate is 5%, that means you’ll be charged 5% of the loan value every year – but you won’t need to pay this immediately. Instead, it will be assessed at the end of your loan term or when you sell the home.

In the case of an HECM backed by the FHA, the origination fee is charged by the reverse mortgage lender to cover their cost of processing your loan application. Usually the origination fee is equal to 2% of the first $200,000 of your home’s value and 1% of any amount above that, <a href="https://www.consumerfinance.gov/ask-cfpb/what-are-the-costs-i-will-have-to-pay-for-a-reverse-mortgage-en-237/" target="_blank">with a maximum of $6,000</a>. If your home is worth $125,000 or less, the origination fee <a href="https://www.aag.com/reverse-mortgage/loan-costs/" target="_blank">cannot exceed $2,500</a>.

Here’s an example. If your home is valued at $350,000, you might expect to pay the following origination fee:

<center>$200,000 x 2% = $4,000</center>
<center>$150,000 x 1% = $1,500</center>
<center>TOTAL: $5,500</center>


In addition to these fees, you may need to pay mortgage insurance premiums, closing costs, and typical servicing fees from lenders. 

<h2>Is a Reverse Mortgage Right For You?</h2>
You are the best judge of what is the best fit for you. However, if you’re considering a reverse mortgage, here are a few tips to help you mull it over: 
A reverse mortgage might be right for you if: 
<ul>
<li>You are 62 years of age or older
<li>You have significant equity in your home 
<li>You plan to stay in your home for 5+ more years 
<li>You can afford to continue to pay property taxes, insurance, and other home maintenance costs 
</ul> 
A reverse mortgage might not be right for you if:
<ul>
<li>You have savings or other means of obtaining funds to cover expenses 
<li>You have family members who depend on you for housing 
<li>You want to leave your home for someone to inherit with no strings attached 
</ul> 
<h2>Our Alternative to a Reverse Mortgage</h2>

There are other options to tap into your equity if you need the funds, such as an equity sharing agreement from <a href="http://unison.com" target="_blank">Unison</a>. With Unison, you can access up to 15% of your home’s current value in cash, in exchange for a portion of the home’s future change in value. If your home increases in value, the company shares the gain. If your home decreases in value, the company typically shares the loss. There’s no monthly payments, and no interest; you simply settle up when you decide to sell your home, or you can buy Unison out at any time during the 30-year term. 

Unison doesn’t have an age requirement, so if you’re concerned about saving for your future–whether by consolidating debt now, renovating your home, starting a business, or simply diversifying your investments–you can get started right away instead of waiting for retirement. 

Sound good to you? See how much equity you can access with a free estimate that has no obligation, and no impact on your credit score.


The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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We explain how a reverse mortgage works, including how much it pays and how much it costs

Reverse Mortgages: What They Are & How They Work| Unison Equity Sharing

Life can be expensive and unpredictable. We all find ourselves short on funds for something, sooner or later. However, instead of taking out a loan or loading up your credit cards, if you’re already a homeowner with equity in your home, you have additional options. (“Equity” is the difference between what your home is worth and how much you owe on your loan. Your equity increases over time if the property value increases or the mortgage loan balance is paid down). Read on to learn more about how to access the equity in your home.

 <h2>Access Equity by Refinancing</h2>

<h3>Cash-Out Refinance</h3>
If you have substantial equity in your home, a cash-out refinance lets you pay off your current mortgage by refinancing it at a higher amount and taking the difference in cash. Closing costs are usually high, but if you have a high credit score, you could qualify for a lower interest rate than your original mortgage.
 Lower interest rates are certainly good news, but if you're using the cash to pay off debt, you might just be delaying the inevitable, and now with your home as collateral. Using the funds to renovate and increase the value of your home is a better option; don't forget, though, that you've restarted the clock, so to speak, on all of your housing debt. As a result, you will increase your lifetime interest costs, even if the deal is sweeter.

<h2>Access Equity Without Refinancing</h2>
<h3>Home equity loan</h3>
Similar in structure to your primary mortgage, this option could make sense if you don’t want to refinance that loan. With a home equity loan, you borrow against the equity in your home and receive a lump sum of money that you have to pay back each month within 15 years. The interest rate is usually fixed, but is typically higher than your primary mortgage. Home equity loans are popular for homeowners with an immediate need for the entire balance, such as a medical emergency. Though you can get a home equity loan without refinancing, such loans are often called a "second mortgage" because you will have an additional monthly payment on top of your regular mortgage. 

<h3>Home Equity Line of Credit (HELOC)</h3> 
 Like a home equity loan, a <a href="https://unison.com/blog/about-helocs/">HELOC</a> lets you borrow against the equity in your home. The remaining value of the home provides your bank with insurance on your primary mortgage. During the draw period, you borrow and pay interest on that which you use. Then, during the repayment period, your monthly payments increase. 
 It's important to note that a HELOC adds significantly more debt to your burden. Monthly payments are often high because they pay off more interest than principal on the outstanding balance. Most HELOCs have variable interest rates, too, which means that the rate can change at any time and you will have to adjust your budget accordingly.
 Another drawback is the requirement that borrowers have to withdraw a minimum amount of money, even if it’s more than what’s needed. Interest is calculated on the amount borrowed, which means borrowers might pay interest on money they didn’t need in the first place. So while a HELOC does make it possible for one to access their equity without refinancing, it might not be the best option for your situation.

<h3> Personal loan </h3>
A personal loan does not use your home as collateral, but you’ll need a high credit score to qualify for the best rates. Even then, those rates will almost always be higher than with home equity financing. And because a personal loan does accrue interest, it is a form of debt. 

<h2>How to Access Home Equity Without Refinancing or Adding Debt</h2>
<h3> Home Sale Leaseback</h3>
 A home sale leaseback is a real estate transaction where a homeowner sells their property to an investor or a company and becomes a tenant, paying rent to continue living in the same property.

 This arrangement can be useful for homeowners who need to access the equity in their home but wish to continue living in the same place. However, the homeowner loses ownership and all of its advantages, such as building equity over time. They will also not have control over the same aspects that they previously did, and potentially even face rent increases if there is a fixed term that expires. 

<h3> Unison Equity Sharing Agreement</h3>
 Unison is the world’s first home equity sharing company with a mission to disrupt the old ways and provide a smarter, better way to buy and own homes. Our innovative HomeOwner program lets you tap into the wealth you’ve accumulated in your home, without borrowing from a bank, incurring extra interest charges or making monthly payments. Rather than a loan, we’re a long-term investor in your home, until you decide to sell up to 30 years in the future.
<h3>Here’s how HomeOwner works</h3>
 We invest up to 15% of the current market value of your home. You can use all or a portion of this money however you want--to lower debt, renovate your home, start a business, fund your retirement or pay school tuition. 
 When you sell your house, the return on the investment is split depending on the percentage invested. If the value of the home has increased, we share in the profit of our original investment. If the value has decreased, we share in the loss.
 You pay less because Unison is an investment partner in your home, not a bank.
 We have a vested interest in your success. And a personal one, too.
 
 
See how much equity you can access with a <a href="https://estimate.unison.com/">free estimate</a> that has no obligation, and no impact on your credit score. 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Home equity sharing is a smarter way to tap into the equity you own without monthly payment or added debt. Learn how you can access your home equity funds through a partnership with Unison.

Access Equity without Adding Debt | Unison Equity Sharing

Debt can feel like an iron weight chained to your ankle, dragging you deep underwater, far from the surface and the air of financial freedom. It may sound dramatic, but the simile is apt–debt is that much of an obstacle, and can be just as overwhelming and seemingly impossible to escape, once you find yourself in its clutches. 

However, the important thing to remember is that escaping debt is not impossible. If you find yourself struggling to find the light at the end of the tunnel, this blog post will outline several strategies that could potentially help you. 

<h2>Understand Your Debt</h2>
The first step to smart debt management is figuring out just how much debt — and what kind — you have. Each type of debt comes with its own set of considerations and rules. Some of the most common kinds of debt are: 

<ul>
<li>Mortgages
<li>Auto Loans
<li>Credit Card Debt
<li>Student Loans
<li>Medical Debt
</ul>
 

<h3>Assess Your Debt</h3> 

To do this, you must gather all of your financial documents and records: bank statements, credit card statements, loan statements, and any other relevant financial paperwork. 

Then, make a comprehensive list of every debt you owe. Include the following details for each debt:
<ul>
<li>Creditor or lender's name
<li>Type of debt
<li>Account number
<li>Current balance owed
<li>Interest rate
<li>Minimum monthly payment
<li>Due date
</ul>
 

You should obtain a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) at least once a year; it will provide a detailed summary of your outstanding debts, account balances, and payment history. Make sure the information on your credit report matches the debts you've listed. 

From this point, you should be able to organize your debts by priority. Categorize your debts into different groups based on factors like interest rates, tax deductibility (for example, mortgage interest may be tax-deductible), and importance. 

As you’re considering your debt, try to reflect on the root causes of its accumulation. Where is most of it saddled; how and where did it begin to get away from you? Even once debt is offset, if behaviors and habits are left unaddressed, you may find yourself back in the exact same position in future. 

<h3>Create Your Debt Management Plan</h3>
 

It is absolutely key to create a realistic budget and track your expenses when you’re trying to reduce debt. 

To set a realistic budget:
<ul>
<li>Calculate your income: This should include your salary, bonuses, rental income, side gigs, and any other funds that regularly come in.
<li>List your fixed expenses: regular and consistent monthly costs that don't vary much, including everything from mortgage or rent, to utilities, insurance, and even your streaming services.
<li>Identify variable expenses: review your past spending to estimate the costs that fluctuate from month to month, like groceries, dining out, entertainment, and transportation.
<li>Set aside savings: remember to pay yourself first by treating savings as a non-negotiable expense, and allocate a portion of your income to savings, including contributions to retirement accounts, emergency funds, and other goals.
<li>Factor in irregular spending: some expenses occur periodically but not monthly, like annual insurance premiums, holiday gifts, or car maintenance. Divide the annual cost by 12 to include them in your monthly budget.
</ul>

Taking all of these factors into account, create a budget that balances your income with the listed expenses and savings goals. Make sure your budget is realistic and sustainable over the long term–this is one instance when you don’t want to be overambitious. 
The next step is to consider the minimum monthly payments for each of your debts. You should have the necessary information for each debt–like the interest rate, outstanding balance, and the minimum monthly payment required–from the list you’ve already made. (If not, you can find this information on your monthly statements or by contacting your lenders). If you possibly can, it might be worth paying over the minimum monthly payment for some of these debts; you could dig yourself out more quickly. 

When you are trying to decide how much you can reasonably contribute to debt repayment each month, look at the budget you have constructed. Allocate a significant portion of your surplus towards paying off your debts. Consider either focusing on the highest-interest debt first (the debt avalanche method) or the smallest balance (the debt snowball method).
 

<h2>Prioritize Debt Repayment Strategies</h2>

 As mentioned above, there are multiple different methods or strategies you might employ when trying to eliminate debt. 

Avalanche Method
A debt repayment strategy that focuses on paying off your debts in a way that minimizes the total interest you'll pay over time, prioritizing high-interest debts to allow you to become debt-free more quickly and cost-effectively. 

You will first arrange your list of debts in descending order, with the debt that has the highest interest rate at the top of the list and the one with the lowest interest rate at the bottom. Now, even as you continue to make the minimum monthly payments on all of your debts to avoid late fees and maintain a positive credit history, allocate any additional funds you have available for debt repayment to that debt at the top of your list. This is where the method gets its name, as it "avalanches" your efforts toward the highest-cost debt.

 Once you've paid off the first debt, take the money you were allocating to it (both the minimum payment and the extra funds) and apply it to the next debt on the list. Keep going down your list until it’s empty! 

Snowball Method
The debt snowball method focuses on paying off the smallest debts first. 

Arrange your list of debts in ascending order, with the debt with the smallest outstanding balance at the top of the list and the one with the largest balance at the bottom. While you continue to make the minimum monthly payments on all of your debts to avoid late fees and maintain a positive credit history, dedicate any additional funds you have available for debt repayment to the debt at the top of your list (the one with the smallest balance). 

Put as much money as possible toward paying off the debt with the smallest balance while making minimum payments on the others. As you pay off this smallest debt, you'll experience a sense of accomplishment and motivation! Once that smallest debt at the top of the list has been paid off, get to work on the next debt on the list. 

By paying off smaller debts first, you achieve quick wins, which can boost your confidence and motivation. As you clear each debt, the amount you can allocate to the next debt increases, helping you build momentum. 

Note that the debt snowball method may not minimize the total interest you pay–unlike the debt avalanche method. However, it can be highly effective for people who need the motivation to stay committed to their debt repayment plan. 

If you’re wondering whether it’s better to pay off debt with your surplus income each month, rather than allocating some to your savings, you’re not alone; it’s a common conundrum. As a general rule, the sooner you can get out of debt, the more money you’ll save in the long run, and the faster you can put that portion of your budget into savings. According to numbers from the Bureau of Labor Statistics and U.S. Census Bureau analyzed by <a href="https://www.nerdwallet.com/article/credit-cards/average-credit-card-debt-household">NerdWallet</a>, U.S. households carrying credit card debt will pay over $1,380 in interest this year. Obviously, the sooner you can relieve yourself of that kind of debt, the better! 

Plus, high-interest debt can accumulate interest at a much higher rate than what you can earn from savings or investments. So, by paying off high-interest debt, you are effectively "earning" the interest rate you would have paid on the debt. 

Lastly, it’s important to remember that debt has a negative impact on your credit score. A low credit score will make it difficult for you to obtain favorable terms for future loans and endeavors in general–so, again, in the long run, it can be a good idea to prioritize paying off debt over increasing your savings. 

<h2>Negotiate with Creditors</h2>

Did you know that it may be possible to negotiate with your creditors for lower interest rates? If you are able to do so, you could reduce the total amount of interest you'll pay over the life of the loan. This can save you a substantial amount of money, especially if you have large outstanding balances or high-interest debts. Plus, the lower monthly payments would make it easier to meet your financial obligations and improve your monthly cash flow, reducing financial stress. It could even help you climb out of debt more quickly! 

Review your payment history, and research the current interest rates for comparable loans. If you have made your payments on time, you will gain credibility with your creditor, and the other rates should give you a strong basis of comparison while negotiating. When you speak to the lender, you should be prepared to provide specific reasons for your request, such as financial hardship, a history of on-time payments, or those competitive market rates. 

During the conversation, explain your financial situation honestly and avoid becoming confrontational. Clearly state your request for a lower interest rate. For example, you might say, "I'm currently paying an interest rate of X%, but I've seen other offers for similar products at Y%. I'm wondering if it's possible to lower my interest rate to match or come closer to those rates." Ultimately, you may need to wheedle or compromise–but whatever the outcome, if you reach an agreement with the creditor of any kind, request written confirmation of the new interest rate and any changes to the terms of your debt. 

<h2>Consider Debt Consolidation Loans and Other Alternatives</h2>

A debt consolidation loan is a financial product that allows you to combine multiple debts into a single loan. Once you have a debt consolidation loan, you'll have a single monthly payment to make, typically to the lender that provided the consolidation loan. This is more convenient and easier to manage than keeping track of multiple payments to different creditors. Other benefits include the opportunity to obtain a fixed interest rate, as well as the potential to improve your credit score by making consistent, on-time payments on such a loan. It’s also possible that you can pay off your debt more quickly by focusing on a single, consolidated loan, as you're likely directing more of your monthly payment toward the principal balance. 

Another strategy is the transfer of credit card balances. If you obtain a new credit card that offers a promotional 0% or low-interest rate on balance transfers, you might be able to transfer the balances from your existing credit cards. This move would consolidate your debt into one place, and, during the promotional period, you won't incur additional interest charges on the transferred balances. However, despite the no-interest promotions, many credit cards do charge a fee for balance transfers–typically a percentage of the amount transferred. Plus, you can’t forget that the interest rate will kick in after the initial promotional period is over, and that interest rate may be even higher with the ones you were struggling with on the original credit cards! It’s important to have a plan in place to pay off the debt before the new interest rate begins to apply to your balance. 

As a last resort, one can declare bankruptcy, which is a legal process that allows individuals and businesses to seek relief from overwhelming debts and obtain a fresh financial start. This is typically only done when other options for managing debt have been exhausted. There are two types of bankruptcy–Chapter 7, is the most common form–and Chapter 13. Chapter 7 involves the liquidation of non-exempt assets to pay off debts, and many unsecured debts (e.g., credit card debt, medical bills) can be discharged thusly. On the other hand, Chapter 13 allows individuals with a regular income to create a repayment plan to pay back their debts over three to five years–and, you can keep your assets. Again, both types are meant to be used as the very last resort. Bankruptcy will remain on your credit report for several years, affecting your ability to obtain credit in the future, so it is not a step to be taken lightly. Declaring bankruptcy is a serious decision, and it can involve a lot of nuance. We highly recommend that, if anyone is considering going that route, they talk with a bankruptcy lawyer or other specialist. Our summary is meant only to provide general background and information. 

However, there is a newer option available to pay down your debts that you may want to consider. <a href="https://unison.com">Unison</a> pioneered the equity sharing agreement, and has helped over 10,000 homeowners tap into their equity in order to live the lives they want–including to break free of debt!. With Unison, you can access up to 15% of your home’s current value with zero interest or monthly payments, in exchange for an agreed upon percentage of your home’s future change in value at the end of the agreement–typically in 30 years or at the time of sale. Instead of exchanging several monthly payments for a single, enormous monthly payment, imagine the monthly payments disappearing altogether! If that sounds like a good fit for you, you can <a href="https://estimate.unison.com">get a free estimate</a> today, with no obligation or effect on your credit score. 

<h2>Adjust Your Lifestyle</h2>
While we already discussed making conscious spending choices and cutting unnecessary expenses, it’s important to emphasize the fact that, once you’ve discharged your debt, if you don’t change your habits, you may find yourself back in the exact same situation. If you think you will struggle to adjust your lifestyle accordingly, you might need to consider more ways to supplement your income like starting a side-gig or getting a part-time job. It may be time to ask for a raise, or even sell an asset. If you live in a big city, for example, you may be able to sell your car and rely solely on public transportation instead. 

The debt-free journey is a long one. In order to stay committed, you should celebrate milestones and develop forms of positive reinforcement. It might also be a good idea to enroll in credit counseling; there’s no reason you have to undertake the mission alone. While transforming our lives is never easy, it is often worthwhile. Don’t give up!

 



 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Need help finding the best way to get rid of debt? From debt reduction strategies to practical budgeting tips, here are steps to get out of debt faster.

How to Get Out of Debt | Unison Equity Sharing

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If you're thinking of tapping into your equity to consolidate your debt or pay for renovations, you should be sure to research your options thoroughly. This post will educate you on the cash-out refinance versus the home equity loan.

Cash-Out ReFi vs Home Equity Loan

Getting ready to buy a home? Then you’ve probably heard that you need to save for a down payment. When it comes to figuring out how much your down payment should be, most people advise 20% of a home's purchase price. But when you want to buy in a hot real estate market — or a market with homes worth more than the average city in the US — 20 percent of a home’s purchase price can easily soar over $100,000. And most of us would agree that saving $100,000 or more in cash is not an easy feat. Below, we compare the benefits of getting a 10% down mortgage versus a 20% down mortgage. 

<h3>Yes, You Can Get a Mortgage with Less than 20 Percent Down</h3>
Thankfully, there’s some good news for hopeful homebuyers: the 20 percent rule isn’t hard and fast, and lenders will often underwrite your mortgage even with a smaller down payment. But there are a few catches. 20 percent is the gold standard, and lenders do prefer to see that you have that much available to put toward your purchase. 

There are several reasons for this preference: 
<ul>
<li>Putting down more upfront means you need to take on less debt, which can also help increase your chances of getting the mortgage you want. Lenders usually can’t approve a mortgage that puts your debt-to-income ratio above 43 percent.</li>
<li>Putting 20 percent or more down on your home helps lenders see you as a less risky borrower, which could help you get a better interest rate.</li>
<li>A bigger down payment can help lower your monthly mortgage payments.</li>
<li>With 20 percent down, you likely won’t have to pay PMI, or private mortgage insurance.</li>
</ul> 

Clearly, there are good reasons for taking the time and effort to save the full 20 percent down payment. If that’s realistic for you, it’s a financially sound move to make. But again, when saving 20 percent means saving $100,000 or more in cash, it’s not financially irresponsible to look at putting down just 10 percent instead. 

<h3>When It Makes More Sense to Put Down Less</h3>
You could argue in favor of the 10 percent down payment — even when you have the ability to put down more when you buy a home. Yes, you will need to pay PMI and your monthly mortgage payments will be slightly larger if you finance more of your home purchase. But the benefit is that you’ll keep more money in your pocket. This is an important factor to consider when you consider buying a home, since a home is a very illiquid asset. 

If you funnel all of your cash into your home purchase and leave nothing in savings, you expose yourself to more risk in other areas of your financial life. You could face an unexpected expense like a medical bill — or something could go wrong with your newly-purchased house. You could lose your income stream if you got laid off soon after receiving your brand-new mortgage. Planning for emergencies like this can prevent you from having to dig yourself deeper into debt during financial stressed times. 

One way to plan is to put 10 percent down on your home and remain liquid (through things like cash savings). This will give you some financial cushion to deal with unexpected expenses and whatever else life throws at you as you become a homeowner. 

Another risk you face with a big down payment is a drop in your home’s value. While we usually assume homes are appreciating assets, that’s not always the case. It’s highly dependent on the time and place you buy and far from a guarantee. 

The chart below summarizes the different pros and cons of 10% vs. 20% down: 

<table width="100%">
 <tr>
 <th><center>10% Down Payment Mortgage</center></th>
 <th><center>20% Down Payment Mortgage</center></th>
 </tr>
 <tr align="left">
 <td>Pros: <ul><li>Buy a home earlier</li><li>Possibly enjoy home price appreciation earlier</li><li>Keep money aside for home improvements or other expenses</li></ul></td>
 <td>Pros: <ul><li>Easier to get approved</li><li>Smaller loan</li><li>Avoid PMI</li><li>Lower monthly payments</li><li>More equity</li></ul></td>
 </tr>
 <tr align="left">
 <td>Cons: <ul><li>Will likely pay PMI</li><li>Higher monthly payments</li><li>More challenging to get approved</li></ul></td>
 <td>Cons: <ul><li>Takes longer to save up</li><li>More money tied up in the home</li><li>Home equity can always decrease</li></ul></td>
 </tr>
</table>
 

Unison will match up to 10 percent of your down payment. If you can save 10 percent on your own, they’ll contribute another 10 percent to give you the full 20 percent you need for your mortgage. These funds aren’t a loan, so there are no monthly payments and no interest fees. Again, it’s an investment — so in addition to helping shoulder the burden of a big down payment, Unison shares in the appreciation or depreciation of your home’s value over time. 

To learn more about a home ownership investment, <a href="/homebuyer_down_payment_help">check out Unison HomeBuyer</a> to see if you’re a good fit. The program can help you finance just 80 percent of your mortgage while only requiring a 10 percent cash down payment, with Unison providing the other 10 percent. 

Another option to consider is a piggyback loan, or 80/10/10 mortgage. A piggyback loan allows you to take out a mortgage to finance 80 percent of your purchase in addition to a second loan for 10 percent of the purchase price. That second loan makes up half your down payment. 

You still need 10 percent in cash, but combined with funds from your second loan, you can get a mortgage without PMI without saving a full 20 percent down payment in cash. There are some drawbacks to consider. Piggyback loans add complication to your financial situation, and they still leave you in a position of financing 90 percent of your home’s purchase price. You need to pay off the second loan and make monthly mortgage payments. That’s unappealing to many potential homebuyers — and if it’s unappealing to you, it probably makes sense to avoid this option. 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

Greenery Front Door Image

While a 20% down payment to purchase a home is typically the gold standard, it may not always be financially feasible. Weigh the pros and cons of 10% and 20% down payment home mortgages.

Do You Need to Put 20% Down? | Unison Equity Sharing | Blog

Four years ago, Rick was selling software to Fortune 1000 companies. Three years ago, he got laid off and was inspired to start his own business. Two years ago, he successfully launched <a href="https://www.firepie.com/">Firepie</a>, a different kind of pizza company. And less than one year ago, Rick used the <a href="https://www.unison.com/how-it-works/">Unison HomeOwner</a> program to unlock equity in his home which has allowed him to re-invest in his company and take it to the next level.
How Rick Started Firepie – A Different Kind of Pizza Company
<img src="https://contentimages.o-prod.unison.com/images/testimonials/Rick_Firepie-e1526930279781.png">
Rick, the founder of Firepie

Rick is a small business owner with a passion for pizza – but not just any pizza. After learning the pizza business in his youth and learning about routing software via his job in the tech industry, he decided to bring those two concepts together. The result is Firepie, which delivers a wood-oven-cooked pizza in 15 minutes or less.

In 2015, Rick faced a moment of truth. He was laid off from his longtime job in the tech industry and dug deep within himself to figure out what his next steps would be. “In the winter of 2015 while sitting on my couch after being laid off, I had a moment to reflect,” said Rick.

In that moment, a voice from the past reminded him of his long-held dream of starting a pizza chain that would excel in fast delivery and convenience without compromising on quality. “It was my younger self, I think, gently reminding me that I had lost my way,” said Rick.

After experiencing this moment of clarity, Rick immediately got to work pursuing his dream. Over the next 6 months, he built the software that would power his business and used money out of his own pocket to turn Firepie into a reality.

The business, based in San Francisco’s Mission District and delivering to Bernal Heights and Noe Valley, took off and quickly began to grow. Rick’s model worked. Not only was he making delicious wood-fired pizza but he was delivering it to customers in 15 minutes. From his custom-designed pizza trailer housing a 900-degree Italian wood burning oven, he churned out lots of firepies and fed lots of happy locals.

There was just one problem: he needed more funding to take the business to the next level.

In Need of Small Business Funding

While Firepie was off to a successful start, Rick ran into problems when he tried to get traditional small business loans from the major banks and credit unions. Since his business was very new, nobody wanted to lend him the money he needed to continue growing.

<img src="https://contentimages.o-prod.unison.com/images/testimonials/Firepie_pizza-e1526930489620.png">
The Firepie wood burning pizza oven

Without additional funding, Rick knew that the business could not continue. At this point, the company was employing almost 15 people and had developed a very satisfied customer base. To lose the company at this juncture would have been heartbreaking.

That’s when Rick learned about Unison and the <a href="/how-it-works/">Unison HomeOwner</a> program. He realized that this program would allow him to tap into the equity in his home without having to make any monthly payments or interest charges. Unison would give him money upfront that he could use to grow his business, and in return, Unison would receive a share of any future gains (or losses) in the home’s value.

At first, it seemed too good to be true. But once he evaluated all the details of the program and weighed the pros and cons, he began to see that it was a perfect fit. “I was able to use the money that was locked up in my house, and it gave me the financial cushion I needed to expand the Firepie business,” he said.

Partnering with Unison and Growing Fast
With the money from Unison, Rick quickly invested in growing Firepie and expanding its operations and footprint. “I’m obsessed with convenience; in my heart I believe we all want (and need) more simplicity, quality, and convenience in our busy lives,” he said.

Today, Firepie is serving even more customers than last year and adding employees quickly to keep up with the demand. With sales increasing, Firepie’s revenues are growing and the business is healthy. Rick is even planning to launch a new Firepie location on the East Coast in the near future, making his long-awaited dream of a fast, delicious pizza chain a reality.

He is very grateful that the <a href="/how-it-works/">Unison HomeOwner</a> program gave him the flexibility he needed to ensure that his business would succeed.
<img src="https://contentimages.o-prod.unison.com/images/testimonials/Firepie-featured-image-e1526929963306.jpg">
Unison will be rooting for Firepie on their journey to becoming a national brand, and we’ll continue to be grateful for our role in making it happen. You can find Rick and the team on Twitter @Firepiepizza. Don’t hesitate to reach out!

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

firepie-testimonial

Thanks to a Unison equity sharing agreement, Rick was able to leverage his home equity to start the business of his dreams. 

Tech Worker Starts a Small Business | Unison® Equity Sharing

After a turbulent year, 2021 couldn’t have come fast enough for many of us. The new year brings with it a new chance for optimistic resolutions. For those resolving to ease some of the uncertainty that may have arisen in 2020, taking a fresh look at your finances — starting with your home — is a great place to start. 

 The home represents the <a href="https://www.unison.com/article/the_state_of_the_american_homeowner">largest single asset</a> and a significant percentage of many homeowners’ net worth — especially those who’ve lived in their house awhile and have built up equity over time. While this model has proven popular in the past, it presents a greater risk for homeowners than many realize. For the homeowners in this position, it may be time to take some of their eggs out of that one basket and diversify their financial portfolio. 

 Here are some tips to help: 

 Check your circumstances: Take a look at your assets and liabilities — your credit cards and other debts, your investments, and your insurance policies — and see if they’re all still a good fit for your current situation. Even in a ‘normal’ year circumstances can change, so it’s important to revisit your portfolio regularly and see if anything needs to be re-evaluated. 

 Do your research: All investments are not created equally. Take the time to learn about different options and make an informed decision. There are lots of great resources out there — check out our <a href="https://www.unison.com/blog">blog</a> for helpful tips and more! If you have questions, a financial advisor can help walk you through your options. 

 Diversify, diversify, diversify: If 2020 taught us anything, it’s that we can’t bank on a single asset to carry the rest of our finances. Take a look at all of your assets, and if — like many Americans — a large percentage of your net wealth is tied up in your home, consider tapping some of the equity you’ve built up and using it to pay off debts, or invest in something long-term like <a href="https://www.unison.com/article/retirement-2020_equity_reverse">your retirement plan</a>, or a child’s education. 

 Equity sharing is still a new concept for many, but it’s one that’s worth learning about as a way of diversifying your portfolio and reducing the concentration of financial risk in your home. Through equity sharing agreements, Unison helps homeowners access their equity flexibly with no monthly payments, interest or added debt. <a href="https://www.unison.com/how-it-works/">Learn more</a>about this smarter, better way to own your home. 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

bench-accounting-8D2k7a3wMKQ-unsplash

New Year, New Portfolio. A new year is a new opportunity to take a holistic look at your finances, investments, and risks, and consider where your home fits into the equation.

Freshen Up Your Finances | Unison® Home Equity Sharing

In the U.S., we generally consider homes a bedrock investment. They’re a key anchor of many Americans' financial portfolios - and, increasingly, their retirement plans. But is that wise?


Today <a href="http://unisonim.com" target="_blank">Unison Investment Management</a> published a groundbreaking Home Volatility Index (read the <a href="https://contentimages.o-prod.unison.com/images/downloads/Volatility_Index_Short_Paper_final.pdf" target="_blank">executive summary</a> and <a href="https://contentimages.o-prod.unison.com/images/im/downloads/Home-Price-Return-and-Volatility-Indices-1.pdf" target="_blank">full white paper</a>), showing that a single home is actually a pretty risky asset - as volatile in value as a stock market index. And homeowner portfolios have exposure to the risk of residential real estate far beyond what’s optimum - due to the combination of low interest rates and very low- downpayment mortgages. 

 <img src="https://contentimages.o-prod.unison.com/images/blog/2019-Volatility-Index4.png" alt="Unison 2019 Volatilty Index" />

The index shows that the long run average annualized volatility of home price appreciation has been approximately 15% per year since 2000 - one percentage point higher than equity stock indices.* Home volatility spiked to more than 35% per year in the heat of the 2008 financial crisis, suggesting that, like equities and fixed-income securities, financial risk of residential real estate is amplified during a financial crisis. 

New home buyers are particularly vulnerable to this risk, the index shows, because they often cash out their entire liquid portfolios to make a down payment. 

Does this mean you shouldn’t buy a house - or should sell the one you own? No, absolutely not. At Unison, we’re big believers in the American Dream. 

It does mean that when you’re thinking about buying and owning a home as part of your financial portfolio, you should be aware of the risk of having your wealth over-concentrated in a single asset. And a home is not just an asset - it’s where you live with your family. And it shouldn’t be where you take excessive risk. 

That’s why we think equity sharing is the new normal. 

Unison connects aspiring homebuyers and existing homeowners with institutional investors who offer debt-free access to cash for the chance to share in a home’s appreciation. Our <a href="https://www.unison.com/how_it_works_homeowner" target="_blank">HomeOwner program</a> allows homeowners to unlock equity in their home to pay off debt, remodel or fund a major purchase. Both programs give you a steady partner, and reduce the amount of capital you have tied up in your home. 

This isn’t a loan, which means there are no monthly payments and no interest. If the home depreciates, then Unison shares in the loss. 

Owning a home is still a smart investment. But putting all your eggs in one basket isn’t a smart strategy.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

volatility index

Unison | Managing Home Volatility Risk

A creative couple with a charming home in Moss Beach regained their feeling of financial freedom by partnering with Unison to unlock the equity in their home—with no additional monthly payments.

<h2>A Happy Couple Living Near the Ocean</h2>
Leslie and John are both self-employed. They met 27 years ago while working at a publishing company, and today they live and work happily in the home they bought together in Moss Beach, a beautiful coastal town 30 miles south of San Francisco. They like the easygoing lifestyle in Moss Beach and they love their home.

Both Leslie and John do freelance work — Leslie runs webinars and trainings for a wide range of companies while John specializes in copyediting for a variety of clients. They work remotely, which means they have plenty of time to enjoy their home.

But at the same time, they dreamed of doing a few important home remodels and they were searching for a higher level of financial security.

<h2>Ready to Pay Off Debt and Make Home Remodels</h2>
As freelancers, both Leslie and John have a variable monthly income. This often makes it difficult to plan for large expenses.

Leslie also had some outstanding debt she was eager to pay off. Leslie’s mother had been facing serious medical challenges that resulted in unexpected travel costs for Leslie, traveling to Southern California to visit her ill mother, which meant more credit card bills. John had some tax bills he was eager to pay off.

Leslie and John really wanted to unshackle themselves from these debts, and Unison was a great solution for their situation.

She and John also wanted to do some long-awaited remodels on their home that would allow them to enjoy it even more.

<h2>Unlocking Home Equity with Unison</h2>
When they reached out to Unison, they were uncertain about what the company could offer, but they wanted to learn more. “I thought at first it was too good to be true,” Leslie said. “I was looking for the catch. But the more we looked into it and read the reviews, it just sounded really good. Unlike a home equity loan, we wouldn’t have to make a big payment every month to pay it back. And that seemed really enticing.”

Once they made the decision to partner with Unison via the Unison HomeOwner program, everything moved quickly. “We decided to go for it,” said Leslie. “We went through the process and it was pretty smooth.” They were pleased at how fast it got done.

With their Unison funds in hand, they were ready to take action. “The first thing I did was pay off all my credit cards, and that just felt really good,” Leslie said. “I immediately paid off Uncle Sam. That made it all worthwhile,” said John.

Not only do they no longer have to worry about debt, but they have a substantial amount set aside for a rainy day. “Now we have an emergency fund to back us up during any down times,” Leslie told us.

Gaining back that feeling of financial freedom was priceless to them. Leslie said, “It has made a really big difference in terms of my stress levels.”

Even better, they can now start planning those home improvements they’d been putting off.

They plan to put in recessed lighting in the living room, which will make it more enjoyable to spend time in. Then Leslie plans to completely remodel one of the bathrooms by laying down beautiful new tile and expanding the shower while also making it more modern. John hopes to continue upgrading the garden with drought-resistant native plants replacing the formerly scraggly, thirsty lawn.

We are so glad these two were able to accomplish their goals with Unison and we’re honored they chose us as a partner.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

With a home equity sharing agreement from Unison, Leslie and John were able to tackle debt, make home renovations, and pay bills. 

Couple Reliefs Debt with Equity | Unison® Home Equity Sharing

If you’re looking at buying a home, there are three little letters you’ll probably hear a lot about in the process: PMI.
 
PMI is private mortgage insurance, which lenders use when borrowers request a loan but look risky due to their low down payment. It’s a big benefit to lenders, because that insurance provides some reimbursement for defaulted loans.

 

 <img src="https://contentimages.o-prod.unison.com/images/blog/How-to-Get-a-No-PMI-Mortgage-Loan-e1506961573535.jpg" />

 
The policy pays out to the lender should a borrower fail to repay their balance. And while PMI enables you to buy a home with less than 20% down, it also adds to your cost: that monthly insurance premium is your responsibility to pay, even though it’s for the benefit of the lender.
 
But it is possible for prospective home buyers to avoid PMI, even with a less-than-20% down payment. Low down payment programs, piggyback loans, home investment plans, and other options give prospective homeowners a few different paths to explore.
 
Here are the pros and cons of each of these alternatives for a “no PMI” mortgage loan, and what you need to know before choosing one for you.
 
<h3>Federal Low Down Payment Mortgage Programs</h3>
 
The <a href="https://www.hud.gov/program_offices/housing/fhahistory" target="_blank">Federal Housing Administration</a> (FHA) insures loans for low-credit borrowers and those with low down payments. With FHA backing, lenders are free to approve riskier loans — which provides more opportunities for homeowners to buy even with very small down payments.
 
	Here are some of the benefits:
	<ul>
		<li>Requires only 3.5% down</li>
		<li>Reasonable interest rates (dependent upon credit, income level, debt, etc.)</li>
		<li>Low closing costs vs. conventional loans</li>
		<li>Consumer avoids PMI</li>
		<li>No set income limit</li>
		<li>Borrower can use gifted money for down payment</li>
	</ul>
 
	However, FHA loans don’t provide a perfect solution. While you’ll avoid the PMI that comes with a conventional loan, there are different types of fees that come with these mortgages.
	Here’s what you need to know about those additional costs:
	<ul>
		<li>Mortgage Insurance Premium (MIP) fee added at closing</li>
		<li>Monthly MIP fees for the life of the loan or 11 years (with 10% or more down)</li>
		<li>MIP costs may exceed PMI when considering upfront fees and monthly premiums</li>
	</ul>
 
	Depending on your situation, a conventional loan — even with PMI — might make more financial sense than an FHA loan.
 
	<h3>No PMI with a VA Loan</h3>
 
	Another option that would allow you to avoid PMI with a low down payment (or even no down payment) is a loan backed by the U.S. Department of <a href="https://www.benefits.va.gov/homeloans/" target="_blank">Veteran’s Affairs</a> (VA loan). For qualifying service members, spouses, and veterans, this can be an outstanding choice for financing.
	<a href="https://www.benefits.va.gov/benefits/factsheets/homeloans/va_guaranteed_home_loans.pdf" target="_blank">VA loan requirements</a> may differ from the lender who carries the loan. Getting the best VA loan will require you to shop around and do your research on individual lenders — but that effort is well worth it for the benefits, which include:/
	<ul>
		<li>No down payment required (unless required by individual lender)</li>
		<li>No minimum credit score required by VA (lender may have guidelines)</li>
		<li>No mortgage insurance payments</li>
		<li>Closing costs capped by VA</li>
		<li>Competitive interest rates</li>
	</ul>
	Keep in mind that you’ll need Certificate of Eligibility (COE) from the VA before applying. And you’ll want to be aware of the downsides here, too:
	<ul>
		<li>VA funding fee (generally around 2.15% of the loan) which can be spread among monthly payments</li>
		<li>Property must meet the standards of VA appraisal process</li>
		<li>Buyer must have residual income (proof of income left after paying all living expenses)</li>
	</ul>
	<h3>No PMI with a Piggyback Loan</h3>
	An 80-10-10 loan, which is also known as a piggyback loan, is a fancy term for a bit of creative financing. Prospective homebuyers take out a conventional mortgage loan — and a second loan that covers half of the total down payment.
	This loan works for buyers who only have a 10% down payment and want to avoid PMI insurance. The larger loan covers 80% of the home’s purchase price and requires a 10% down payment or more.
	The smaller 10% loan makes up the difference of the required 20% down payment to avoid PMI, one of the biggest benefits of using this strategy. Others include:
	<ul>
		<li>Requires only 10% down payment</li>
		<li>Many lenders offer this financing, giving borrowers lots of options for shopping around</li>
		<li>Can result in a lower mortgage payment compared to FHA or conventional with PMI (dependent on various factors)</li>
	</ul>
	However, piggyback loans can be much more expensive in some cases. A mortgage calculator can help determine if a piggyback is cheaper than one loan with PMI, since the second loan debt you need to repay (with interest). That’s one downside, but there are others you need to watch out for as well:
	<ul>
		<li>Must have good credit</li>
		<li>Must qualify for two loans — often from different lenders</li>
		<li>Second mortgage often has an adjustable interest rate</li>
		<li>Two sets of closing costs</li>
		<li>Must make higher payment on second mortgage (often requires only monthly interest payment) to pay it off</li>
	</ul>
	<h3>Down Payment Assistance Programs</h3>
	Most prospective home buyers have no idea that they may be eligible for down payment assistance. Through the <a href="https://www.hud.gov/buying/localbuying" target="_blank">U.S. Department of Housing and Urban Development</a> (HUD), most states have a fund that is allocated for helping low- to mid-income families buy homes of their own.
	These funds are qualified for and dispersed at the local level in the form of grant money that doesn’t need to be repaid. There is assistance for down payments, individuals with disabilities, and help with closing costs among others.
	Here’s what to think about before looking into HUD programs:
	<ul>
		<li>Must meet income limits to qualify</li>
		<li>Credit score requirements vary</li>
		<li>Often requires homeowner education/counseling</li>
		<li>Buyers often must put some money down (requirements vary by state)</li>
		<li>Must show income sufficient to cover expenses</li>
		<li>Often for first-time home buyers (or 3 years since ownership)</li>
		<li>Home may have specific location requirements to qualify</li>
	</ul>
	
	<h3>Home Ownership Investment Programs</h3>
	
	Many of these options for avoiding PMI on a mortgage loan may not apply to you — or they may not provide a cheaper alternative to what you’ll pay with private mortgage insurance. In this case, there’s still one option to consider: home ownership investment programs.
	Programs like <a href="/homebuyer_down_payment_help">Unison HomeBuyer</a> allow you to double your 10% down payment into a full 20% down payment so you can access conventional mortgage loans without paying PMI.
	That money is an investment, which means you don’t have to make monthly payments to Unison. Instead, <a href="/">Unison</a> receives a share of any future change in the value of your home when you sell it – up to 30 years later.
	This allows you to buy the home you want without PMI – while maintaining financial flexibility and avoiding larger monthly payments.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

christin-hume-slbqShqAhEo-unsplash

Learn about your available alternatives to Private Mortgage Insurance (PMI). While PMI enables you to buy a home with less than 20% down, but also adds to your monthly payment even though it’s for the benefit of the lender.

Get a "No PMI" Mortgage Loan | Unison Equity Sharing

Buying a home is tough, owning one is a big responsibility, and all of it is part of the American Dream. At Unison, we believe we can go further together than alone by being partners on your homeownership journey. 

That’s why we’re pleased to announce our expansion into eight states: Indiana, Kansas, Kentucky, New Mexico, South Carolina, Tennessee, Utah and Wisconsin. If you live in one of these states, Unison is probably a new name to you. In a nutshell, we’re in business to partner with you in your new or current home. 
<img src="https://contentimages.o-prod.unison.com/images/blog/Unison-Blog-8_States(1).jpg">

We plan to bring the benefits of home equity sharing to as many people as possible. Every American should have the opportunity to own a home and access their home equity now, and our mission has been to pave a path that helps them do that. We’ve demonstrated that commitment by more than doubling our national footprint over the past two years. We now offer a smarter, better way to buy and own homes in 30 states and Washington, D.C. 

Our latest expansion means over 5 million additional homes may be eligible for the Unison HomeBuyer and HomeOwner programs. If you already own a home and need to pay off debt or medical bills, renovate your home, or send your kids to college, the Unison HomeOwner program could be a fit for you. 

Curious how it works? Watch this video: 

<a href="https://www.youtube.com/watch?v=bCM4-fGDZr8" target="new">Unison HomeOwner</a> 

Unison is also for those who want to buy a home. If you need help with a down payment or a lower monthly mortgage payment — or if you already own a home and want to buy your dream home then consider the Unison HomeBuyer program. 

Check out this video to learn more: 

<a href="https://www.youtube.com/watch?v=xfxK6phJzuA" target="new">Unison HomeBuyer</a> 

We’ve been helping existing and aspiring homeowners for years. Hear from actual customers about their experiences with <a href="https://www.unison.com/success-stories/" target="new">HomeOwner programs.
 
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

unison-lifestyle-drew-bird-a-111

Unison home equity sharing is now available in 8 additional states.

Unison Available in 8 New States | Unison Home Equity Sharing | Blog

A piggyback mortgage loan is a home equity loan or home equity line of credit (<a href="https://www.unison.com/article/how-does-a-HELOC-work">HELOC</a>) issued to a home buyer simultaneously with a conventional mortgage. It allows borrowers to <a href="https://www.unison.com/article/how-to-put-10-percent-down-with-no-PMI">make less than a 20% down payment</a> without having to pay for private mortgage insurance (PMI).

<h3>How does a piggyback loan work?</h3>
Let’s say a home buyer only has 10% of the purchase price in savings for the home they want. They have the option of applying for a first mortgage to cover 90% of the home’s value, but that would require them to pay for <a href="https://www.unison.com/article/how-much-does-pmi-cost">expensive private mortgage insurance</a>. 

Instead, the home buyer could choose to take out a second loan to cover the other 10% of the down payment and avoid paying for PMI. This type of piggyback loan, known as an 80/10/10 loan, is most common. But some borrowers may qualify for an 80/15/5 loan, which only requires the home buyer to pay a 5% down payment. 
<h3>Is it better to pay PMI or get a second mortgage?</h3>
That depends on certain factors, including your credit score. Often, a piggyback second mortgage comes with a higher interest rate, but the borrower may still spend less than they would on private mortgage insurance.

In other cases, the interest rate and total closing costs will drive up the cost of a piggyback loan even higher than the cost of private mortgage insurance on a primary mortgage. Calculate your total monthly mortgage payments for both scenarios before you decide which option is best for you.
Also, keep in mind that piggyback loans can make it difficult to refinance down the road. 
<h3>How do you qualify for a piggyback loan?</h3>
You’ll need good credit to qualify for a piggyback loan. You’ll most likely need a credit score above 680 to be eligible, but the minimum can vary by lender. You can also consider other alternatives. 
<h3>Alternatives to piggyback loans</h3>
There are a few other alternatives that also allow you to <a href="https://www.unison.com/article/how-to-get-mortgage-loan-with-no-PMI">get a mortgage loan with no PMI.</a>
<ul>
<li>Take out an FHA loan. You can get a mortgage with as little as 3.5% down, but you’ll pay mortgage insurance premium fees that may be more costly than PMI. </li>
<li>Explore down payment assistance programs. If you meet the income requirements and you’re a first-time home buyer, you may be eligible for a grant that doesn’t need to be repaid. </li>
 </ul>

Be sure to carefully consider all your options and the associated costs before making a decision about your financing strategy.
 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

ostap-senyuk-80RhP 7GN2U-unsplash

Learn why not all home buyers need a piggyback mortgage loan. A piggyback mortgage loan is a HELOC issued with a conventional mortgage. 

Piggyback Loans Explained | Unison® Home Equity Sharing

If you ask people what is necessary to buy a home, most experts will tell you a cash down payment of at least 20% is a key factor. Lenders will see you as a stronger borrower who brings less risk to the table, and that can increase your chances of getting the mortgage you want with a favorable interest rate.

However, you don’t have to put 20% down to buy a home. In fact, many people are able to buy a home with just 10% down. There’s just one hurdle to overcome: private mortgage insurance (or PMI). In this blog post, we’ll explain the problem with private mortgage insurance and how you can put 10% down while still avoiding PMI.
 
<h3>The Problem with PMI</h3>
Private mortgage insurance is a policy the lender takes out to protect the money they lend you when you take out a mortgage. Lenders typically require PMI when the borrower has less than 20% for a down payment.

If you default on the mortgage loan, the insurance policy will cover the amount of money left on your mortgage. The insurance is designed to protect the lender. It covers them for the money you were supposed to repay but didn’t.

However, you, the homeowner, are actually the one who pays the PMI premiums. Those premiums can add a lot onto your monthly payment. Usually, PMI costs around $30-$70 per month for every $100,000 you borrow, <a href="https://www.zillow.com/mortgage-learning/private-mortgage-insurance/#cost" target="_blank">according to Zillow</a>. Most people want to avoid PMI because it’s an unnecessary cost that doesn’t provide them any value as the homeowner. But how can you put 10% down without paying PMI?
 
<h3>Put 10% Down with No PMI by Using a Piggyback Loan</h3>
A piggyback loan, or a 80/10/10 mortgage, allows you to finance 80% of a home through a mortgage. Then, you put down 10% in cash. The other 10% required to make up a 20% down payment comes from a second loan, worth 10% of the home’s value. That second loan “piggybacks” on the mortgage. It’s completely separate which means it will have its own terms and interest rate. The piggyback loan is still debt and money you need to repay. And it comes with its own monthly payments, which can be quite high. For that reason, home buyers should be cautious about taking on a piggyback loan.
 
<h3>Pay with Points</h3>
Another option is to keep your traditional mortgage and put 10% of your own cash down. Ask your lender if there’s a choice between paying PMI — or adjusting the interest rate on your loan.

Some lenders will allow you to tack half a point of interest onto your mortgage loan in exchange for excusing you from paying private mortgage insurance. The lender may still take out a policy. But with this arrangement, they’ll pay the premiums and you just pay the higher interest rate. However, the higher interest rate can make your mortgage much more expensive. And that cost stays with you for the life of the loan.

Be sure to look at both the short-term and long-term costs before trying any of these options. There are potential drawbacks, including:
<ul>
 <li>Putting 10% down and financing 90% of your purchase means bigger monthly mortgage payments.</li>
 <li>It also means you will have to pay PMI.</li>
 <li>If you ask your lender to pay your PMI it could end up being more expensive because of the higher interest rate.</li>
 <li>Getting a piggyback loan means having more debt that accrues additional interest.</li>
</ul>
 
<h3>Get Support from a Home Ownership Investment</h3>
Instead of dealing with these financial issues, you can turn your 10% down payment into a 20% down payment with the help of a company like <a href="/">Unison</a> who offers home ownership investment programs.

Unison partners with homebuyers to help them buy a home. They are able to match your down payment funds if you have enough cash for a 10% down payment. With a home ownership investment, your monthly mortgage payment will be lower, and you can avoid PMI — without taking on additional debt. Your monthly payments still go toward building your equity in the home.
 
<h3>Conclusion</h3>
A 20% down payment isn’t a requirement if you want to buy a home. In fact, many people who simply don’t have that much cash available or who want to use their money for other things are buying homes without putting 20% down. This often gives them greater financial flexibility and means that not all their money is tied up in an illiquid asset. With the options discussed above, home buyers can purchase a home they like with 10% down and still avoid paying PMI. Just be sure to run those numbers before you make the deal!
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

Understand your down payment options when buying a home. Find ways to avoid PMI and save on this important purchase.

Buy a Home with Less Money Down | Unison Home Equity Sharing

With the American Dream of owning a home more challenging than ever to achieve, aspiring homeowners are asking themselves if it’s worth it to buy or is it better to just rent?

Here’s our analysis on the current state of renting vs. buying:

<h2>The cons of renting</h2> 
If you’ve ever rented a home or apartment, you’re already familiar with the downsides (ah, the sweet memories of your upstairs neighbor playing bass guitar at 3 a.m.). But besides noisy neighbors, there are other negatives:
<ul>
 <li>Rent fluctuations – Typically, your lease will last for a year, during which you’ll be protected from a rent increase. As soon as the lease is up, though, plan on a rent increase. Though local laws usually protect renters by limiting how much rents can increase every year, there’s no cap on how many times a landlord can increase rent over the course of your occupancy. That means you can face a rent increase by the maximum percentage every single year. That affordable rent you had when you first signed the lease could double in less than a decade.</li>
<li>No painting – Since you don’t own an apartment, you likely won’t have the freedom to paint, drill holes in the walls or perform other improvements such as upgrading the cabinets. You’ll need to adhere to your rental property’s rules and regulations.</li>
<li>Rental deposit – To move into an apartment, you’ll need a rental deposit. That can fluctuate depending on local laws, but typically it’s at least the price of rent plus the first month’s rent in advance. If your rent is $1,200, expect to hand over at least $2,400 before you can move in.</li>
<li>Lease constraints – When the lease is up, the property management company will require you to either sign a new lease or pay an increased month-to-month rent amount. Should you wish to move in the middle of your lease, you may have to forfeit your deposit and/or pay a fine to get out of your lease.</li>
<li>Pets – Finding an apartment that accepts pets narrows your options for renting. Some landlords have weight and breed restrictions, and some even charge pet rent on top of the regular rent.</li>
<li>No equity – You never get any of your rent back. You pay your landlord for the right to live in the space, and the money is gone forever. No equity is built, and there’s no return on your investment.</li>
 </ul>
 
 <h2>The pros of renting</h2>
 It’s not all bad. There are some genuine perks to renting:
<ul>
 <li>Moving – If your lease is up, you can give notice, generally 30 days, and then leave without worrying about selling your place. 
Repairs – Your rental property is someone else’s responsibility, so someone else is responsible for maintenance and repairs. There’s something liberating about not having to replace a broken water heater.</li>
 <li>Deposit – Unlike a down payment, your rental deposit is returned when you move out of your apartment, assuming you’ve left it in perfect condition. (For some people, that’s a big assumption.)</li>
 <li>Insurance – While some complexes require renters insurance, many do not, which makes this an optional cost.</li> 
 </ul>

<h2>The cons of owning</h2> 
A space of your own sounds dreamy, but the downsides of owning a home can be nightmarish. 
<ul>
 <li>Neighborhood – It’s easier to afford rent in a posh neighborhood than it is to afford to buy a home in the same area. You may need to live farther away from your dream neighborhood in order to afford the mortgage.</li>
 <li>It’s yours – You’re responsible for maintenance and repairs, which means if the air conditioner breaks or the dishwasher leaks, you’ll need to fork over money for the unexpected expense. </li>
 <li>Property values – There’s no telling how much your home will be worth in 10 years. If your home’s value increases, great! But if it decreases, you may find yourself underwater.</li>
 <li>Taxes – Ah yes, government involvement. You’ll need to factor property taxes into your mortgage costs. Those taxes are likely to increase, too, which means higher payments. </li>
 <li>Moving – It’s much more difficult to move when you own a home, so if your neighbors are terrible or you live directly underneath a jet plane flight path, you’ll likely have to deal with it or go through the ordeal of putting your home up for sale.</li>
 <li>Insurance – You’ll need to pay homeowners insurance on top of your other costs.</li>
 </ul>
 
<h2>The pros of owning</h2> 
Home ownership is a tantalizing thought. Here are some great things about investing in your own place:
<ul>
<li>Equity – Arguably the most compelling reason for owning a home, equity is the actual amount of your home that you own. Equity is a savings account in the form of a house. As you pay off more of your home mortgage and/or as your home increases in value, you’ll have more equity. Equity is also buying power, so you can borrow against your equity, partner with a co-investment company or use your equity to roll into the purchase of another home. When you make your mortgage payments, you’re paying interest, but you’re also paying into your equity. This is why a home is an investment and is the primary reason renting is different from owning.</li>
<li>Tax write-offs – Paying interest on a loan is painful, but that pain is mitigated by tax write-offs. A portion of your interest can be used to decrease the taxes you owe the federal government each year. You may even qualify for a refund.</li>
<li>Upgrades – Making home improvements usually increase the value of your home. If you overhaul and upgrade the kitchen, your home will likely appraise at a higher amount.</li>
<li>Stability – Yes, there’s the emotional stability of always having a place to live, but there’s also the stability of knowing exactly how much your mortgage will be each month. Unlike rent, mortgage payments for fixed-rate mortgages remain the same throughout the duration of your loan, so you always know how much you’ll owe.</li>
<li>Credit building – Owning a home and making on-time payments shows you’re a good borrower and are at low risk of defaulting, which means you’ll be able to qualify for more credit at lower rates.</li>
<li>Do whatever you want – It’s your home, so if you want to turn it into an indoor skate park, go for it. You can remodel, redecorate and reconfigure to your heart’s content. Of course if you’re home is part of a homeowner’s association, you’ll want to play by the rules but having a home of your own certainly allows for more creative expression and customization. </li>
 </ul>
 
 <h2>Crunch the numbers</h2>
 The numbers of renting versus owning vary depending on different factors, such as the price and location of the home as well as the current rental market. 

However, for an idea of how renting compares to buying, here’s the low-down on numbers from major cities:
<h3>San Francisco</h3>
For a modest two-bed, two-bath home in San Francisco, expect to pay at least $800,000. The average rent for a one-bedroom apartment is $3,600/month. Assuming you have a 20% downpayment, the monthly cost of ownership is cheaper than renting after just three years of homeownership.

<img src="https://contentimages.o-prod.unison.com/images/blog/Unison-Home-Coinvesting_Rent-or-Buy_San-Francisco.jpg">

<h3>Seattle</h3>
The average one-bedroom will set you back $2,167 per month in Seattle. The current average home price in King County is $655,000. After paying a 20% down payment, after six years of owning a home, you’ll start spending less on a mortgage than you would paying rent.

<img src="https://contentimages.o-prod.unison.com/images/blog/Unison-Home-Coinvesting_Rent-or-Buy_Seattle-Washington.jpg">

<h3>New York</h3>
The average price of a home in Brooklyn is $782,300, while the average rent is $2,700. If you pay a 20% down payment, you’d start seeing a savings after owning your fancy Brooklyn pad for seven years.

<img src="https://contentimages.o-prod.unison.com/images/blog/Unison-Home-Coinvesting_Rent-or-Buy_New-York.jpg">
<h2>Down payment</h2>
The larger the down payment, the cheaper the mortgage, and the more money you’ll ultimately save. But if you don’t have the 20% of the total home price recommended to buy a home (which is a hefty amount, given the average price of homes in these high-cost cities), Unison can help. Through Unison’s home co-investing strategy, you’ll contribute as little as 5% of the total home price and Unison will contribute the remaining 15%. Unison then shares in either the appreciation or depreciation of the home once you sell, or after 30 years.

<h2>The final verdict</h2>
While there are many variables in determining if it is cheaper to own than to rent, owning normally makes more sense than renting. There are two caveats: time and down payment. The longer you stay in your home, the more affordable it will be as opposed to renting, and the greater down payment you’re able to initially invest will determine how much money you save on interest and mortgage costs.

Bottom line: Utilize a co-investment company to contribute a higher down payment and get lower monthly mortgage payments. And once you’re in your dream home, stay there for at least five years to make the most out of your investment.

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

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Homeownership is part of the American dream, but as it gets more and more difficult, it's natural to wonder if it's really worth your time and money.

Pros & Cons: Renting vs Owning | Unison® Home Equity Sharing

Set yourself up for success by making home improvements before putting your home on the market. The first impression is everything, and easy updates add value and can make a home more desirable to home buyers in a competitive market. 

Simple upgrades can instantly validate a higher asking price and increase the resale value of your home. 

When you're going to sell real estate, opt for updates that offer a return on investment. The goal isn't to end up in Architectural Digest or be the most-liked home on Instagram. 

Secondly, consider the home's value in a seller's market. It could make sense to overinvest in the improvement because it will fix a major issue, or will set the home apart to potential buyers.

Home improvement projects and the value we associate with them is somewhat relative, especially when you're comparing the value-add of a coat of paint versus a new roof. 

Weigh the opportunity cost, your skill level, and make a judgment call on what improvements will increase your home's value. Consulting with a real estate agent to confirm the value of your home is a good idea, and whether to take out a home improvement loan.

<h3>General improvements</h3>
Look closely at your home and flag the things that may be “easy” to update, whether in a bedroom, hallway, or main living space:
<ul>
<li>Paint trim and walls</li>
<li>Refinish old hardwood floors and deep clean carpets</li>
<li>Replace old light switches and outlets</li>
<li>Replace outdated light fixtures and ceiling fans</li>
<li>Make energy-efficiency updates to improve energy bills, such as improving insulation, installing a smart thermostat, or investing in window replacements</li>
<li>Minimize your belongings (it can help to accentuate the actual square footage)</li>
 </ul>
 
<h3>Kitchen improvements</h3>
While a kitchen renovation offers a significant impact and will increase the value of your home overall, it's not likely that you'll see recoup 100% of your investment when you sell.

The better option is to opt for a minor kitchen remodel, and make improvements that visibly update the look, without requiring a large investment in the space.
<ul>
<li>Update appliances with products that are modern and energy-efficient (you may even be able to bring these with you to a new house, but for showing purposes, they'll help the space look really nice)</li>
<li>Paint outdated cabinetry, or replace all of the cabinet door and drawer fronts with modern styles</li>
<li>Upgrade hardware</li>
<li>Replace countertops</li>
 </ul>
 
<h3>Bathroom improvements</h3>
A full bathroom remodel might add home value, but as with a kitchen remodeling project, it's not likely that you'll profit from the improvements. 

Replacing all of the tile, for example, is an expensive and laborious undertaking, and you risk choosing a style that might not appeal to a future buyer.

Instead, consider how it would look if you were to:
<ul>
<li>Upgrade an outdated vanity, or replace an old sink top</li>
<li>Replace an old toilet</li>
<li>Buy a new shower curtain and/or shower rod</li>
<li>Replace an old shower head</li>
 </ul>
 
<h3>Living room and family room improvements</h3>
Opt to make main living areas appear turnkey, organized and neutral to allow home buyers to visualize their own belongings in the space.
<ul>
<li>Install a new gas fireplace insert</li>
<li>Update an old fireplace with manufactured stone veneer</li>
<li>Have wiring for any wall-mounted televisions set up to route through the wall joists</li>
<li>Embrace natural light</li>
 </ul>
 

<h3>Curb appeal home improvements</h3>
Taking the time to enhance your home's curb appeal can pay off big. 

Routine maintenance, like sweeping sidewalks and washing the windows and siding goes a long way at making a home appear well-maintained, but in addition:
<ul>
<li>Paint the front door, and any other entry doors</li>
<li>Replace or paint an old garage door</li>
<li>Reseal an asphalt driveway</li>
<li>Stain a wood deck</li>
<li>Consider painting a brick exterior</li>
<li>Replace damaged siding</li>
<li>Prune trees and shrubs</li>
<li>Add mulch to garden beds</li>
 </ul>

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

brett-jordan-6UrMapIpFC8-unsplash

These simple upgrades to your home can validate a higher asking price and increase resale value. Unison shares tips on which home improvement projects will give you the most bang for your buck.

Improvements to Increase Your Home's Value | Unison.com

If you put down less than 20 percent in cash on your conventional mortgage loan, chances are that you should plan to pay private mortgage insurance. 

Private mortgage insurance, or PMI, sounds like it might be a helpful protection against something happening to your mortgage. And it is — but for your lender, not for you. 

<img src="https://contentimages.o-prod.unison.com/images/blog/How-Much-Does-PMI-Cost-e1514920318503.jpg" />

The policy protects the lender if you stop making payments on the loan or end up in foreclosure. Even though the lender is the beneficiary of the policy, you as the homeowner must pay the monthly premiums. 

Here’s what you need to know about how it works and how much it costs to pay PMI. 

<h3>Where Do You Pay PMI — and How Much Does PMI Cost?</h3>
The PMI cost is usually rolled into your monthly mortgage payment, along with principal and interest, property taxes and your homeowner’s insurance premium. 

So, how much does PMI cost: it depends on a few different factors, but you can generally expect to pay a monthly premium of $30 to $70 for every $100,000 that you borrowed, <a href="http://www.zillow.com/mortgage-learning/private-mortgage-insurance/#cost" target="_blank">according to Zillow</a>. 

But depending on your financial situation, saving more could take years of work — and not everyone wants to invest in a home with a third party. In that case, you’ll need to face PMI as an added expense on your mortgage. 

<h3>Breaking Down the Cost of PMI</h3>
Clearly, there are both pros and cons of PMI. We can use a specific example to better understand how PMI cost impacts the amount of money you need to pay each month on your mortgage. 

Let’s say you buy a house and get a 30-year loan for $250,000 with an interest rate of 4 percent. Your monthly payment for principal and interest will be $1,194. 

Let’s also say that you owe the following each month: 
<ul>
<li>Property taxes: $100</li>
<li>Homeowners insurance: $80</li>
<li>PMI: $125</li>
 </ul>
Your total monthly payment with the $125 worth of PMI would be $1,499. Without PMI, you’d pay $1,374 per month. 

<h3>PMI Isn’t Forever, But Removing It Isn’t Easy</h3>

While paying PMI isn’t ideal, you won’t be on the hook forever. You can request for the lender to remove PMI from your loan once you reach a <a href="https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-to-value-ratio-and-how-does-it-relate-to-my-costs-en-121/" target="_blank">loan-to-value</a> ratio of 80 percent. That includes paying for an appraisal to prove your loan is indeed 80 percent of the home’s value. 

If you wait, though, the lender is required to remove PMI automatically once the loan balance is 78 percent of the original home value. 

Still, some lenders don’t remove this right on schedule. It’s important to know when PMI cost should drop according to your <a href="https://www.investopedia.com/terms/a/amortization_schedule.asp" target="_blank">amortization schedule</a>, and to call the lender to confirm PMI will come off your monthly payment when it’s time. 

Let’s use another example to understand how much you might pay in PMI cost. Going back to our previous example, we can say the original value of the home you bought was $293,750. 

You took out a $250,000 mortgage, so in this case, you can request that the lender remove PMI once your balance reaches $235,000. 

With a monthly payment of $1,194 (that’s your principal and interest), it will take you 40 months before you can request that the lender remove PMI. By this time, with a monthly PMI cost of $125, you’ll have paid $5,000 toward PMI. 

If you believe a combination of your mortgage payments plus the home’s increase in value thanks to a good market makes your loan 80 percent or less of the home’s total value, it might make sense to hire an appraiser and request your lender take PMI off early. 

Appraisals <a href="https://www.homeadvisor.com/cost/inspectors-and-appraisers/hire-a-property-appraiser/" target="_blank">typically cost between $250 and $450</a>, which would be well worth the cost if it meant you didn’t need to spend the full $5,000 in PMI that you would pay for if you simply waited for the premium to fall off as scheduled. 

<h3>Should You Wait and Save 20 Percent for a Down Payment Instead?</h3>
While there are ways to put 10% down with no PMI, you can be sure to avoid PMI altogether if you simply save 20 percent or more for a down payment. That’s not always easy, of course. It could take you far longer to save that full amount before you buy. 

There are risks to going this slower route, too. Imagine that it takes you 5 years to save the full down payment and you can then get a 30-year loan for $235,000 instead of $250,000 — but if interest rates rise during the years you’re saving, it might not be worth it. 

Moving from a 4 percent interest rate to a 5 percent rate increases your monthly payment to $1,342 for principal and interest. You’ll also pay an extra $180 for property taxes and homeowner’s insurance, bringing your total to $1,522. 

Of course, there’s no guarantee that this is how things will play out. It’s impossible to predict how interest rates will change, even in the short term. 

The point is that any strategy you use for buying a house comes with risk, and some homeowners prefer to act sooner rather than leave their home-buying plans up to chance. If you really don’t want to pay PMI, you can research options for “no PMI” mortgage loans. 

<h3>How to Lower Your PMI</h3>
If you’re planning on putting down less than 20 percent on your mortgage, you’re not totally at the mercy of the lender as far as your PMI premium goes. 

Since PMI is meant to protect lenders against default, they’ll charge higher premiums to borrowers who are more at risk of default. Having good or excellent credit means you’re less of a risk, so you’ll get a lower premium. 

If your credit isn’t stellar, look for ways to <a href="https://www.nerdwallet.com/blog/finance/how-to-build-credit/" target="_blank">build your credit score</a> so that you can qualify for a lower PMI payment. And as a result, you may even qualify for a lower interest rate and, therefore, a lower overall mortgage payment. 

<h3>Make an Informed Decision</h3>
There’s no right answer when it comes to how much you should put down on your mortgage. 

If you have enough for a 20 percent down payment, you won’t have to worry about the cost of PMI. But if you don’t have enough, it’s important to know how much it will cost you on a monthly basis and over the long run — or to know the alternatives available. 

For your specific situation, use an <a href="https://www.hsh.com/calc-pmi.html" target="_blank">online PMI calculator</a> to find out how much it will cost you. Knowing those figures will help you make a more informed decision for your mortgage. 

 
 
 
The content on this page provides general consumer information. It is not legal or financial advice. Unison has provided these links for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of the other websites.

linkedin-sales-solutions-wS73LE0GnKs-unsplash

Private mortgage insurance, or PMI, sounds like it might be a helpful protection against something happening to your mortgage. And it is — but for your lender, not for you.

The Cost of PMI | Unison® Home Equity Sharing

Unison Holidays Wish List 2023 Sweepstakes Official Rules 

The following official rules (“Official Rules”) govern the Unison’s Holidays Wish List 2023 sweepstakes (the “Sweepstakes”). 

NO PURCHASE NECESSARY TO ENTER OR WIN. A PURCHASE DOES NOT IMPROVE YOUR CHANCES OF WINNING. 

<ol>
 <li>Sponsorship. The sponsor is Real Estate Equity Exchange, Inc. d/b/a Unison, 650 California Street, Suite 1800, San Francisco, CA 94108 (“Sponsor”). Sponsor will conduct the Sweepstakes substantially as described in these Official Rules. 
 <li>Eligibility. The Sweepstakes is open to legal residents of the United States of America who complete the entry requirements set forth below in paragraph 5 (How to Enter). Entrants must be 18 years or older as of their date of entry in order to qualify. The Sweepstakes is subject to federal, state, and local laws and regulations and void where prohibited by law. Sponsor’s employees, its subsidiaries, affiliates, suppliers, partners, advertising and promotion agencies, and directors (collectively the “Employees”), as well as members of an Employees' immediate family and/or those living in the same household of Employees are ineligible to participate in the Sweepstakes. 
 <li>Agreement to the Official Rules. By entering this Sweepstakes, the entrant (“You”) agrees to abide by the Sponsor's Official Rules and decisions, which are fully and unconditionally binding in all respects. The Sponsor reserves the right to refuse, withdraw, or disqualify any entry at any time at the Sponsor’s sole discretion. By entering this Sweepstakes, You represent and warrant that You are eligible to participate based on eligibility requirements explained in the Official Rules. You also agree to accept the decisions of the Sponsor as final and binding as it relates to the content of the Sweepstakes.
 <li>Entry Periods. To be eligible for the Sweepstakes, entries must be received between 12:01 a.m. Central Time, November 16, 2023 and 11:59 p.m. Central Time, November 30, 2023 (“Entry Period”).
 <li>How to Enter. There are two ways to enter: 
First, eligible entrants can enter the Sweepstakes by responding to and completing the survey questions sent by Unison on November 16, 2023 (and re-sent on November 30, 2023). Upon receipt of the survey invitation, eligible entrants will need to open the link and follow the on-screen instructions to complete the full survey, including clicking on the “Submit” button to record the survey responses. Although Unison will send out the survey invitation twice on November 16, 2023 and again on November 30, 2023, eligible entrants need only fill out the survey once, and regardless only one entry may be submitted. The survey must be completed during the Entry Period. 
Second, eligible entrants can enter the Sweepstakes by emailing sweepstakes@unison.com with the subject line “Holidays Wish List Sweepstakes.” 
Regardless of the method of entry, entries must be submitted within the designated Entry Period. Regardless of the method of entry, eligible entrants may submit only one entry during the Entry Period. Winner(s) will be selected and notified as stated below in paragraph 8 (Selection and Notification of Winner(s)). Fraudulent methods of entry or circumvention of the rules may result in the Sponsor invalidating entrant’s entries and removing entrant from the Sweepstakes at the Sponsor’s sole discretion. Entries must fully meet all Sweepstakes requirements, as specified in the Official Rules, in order to be eligible to win a prize. Incomplete entries or those that do not adhere to the Official Rules or specifications will be disqualified at the Sponsor's sole discretion. 
 <li>Prizes. The following prizes will be awarded to winner(s) of the Sweepstakes (the “Winner(s)”): one (1) prepaid gift card in the amount of Five Hundred Dollars ($500) and one (1) Bear Creek® Gift Box, approximate retail value of ninety dollars ($90) (together, the “Grand Prize”); and five (5) prepaid gift cards in the amount of Two Hundred Dollars ($200) (“First Prizes”). The actual/appraised prize value may differ at the time the prize is awarded. The prize(s) shall be determined solely by the Sponsor. There shall be no cash or other prize substitution permitted except at the Sponsor’s discretion. The prize is non-transferable. The Winner, upon acceptance of the prize, is solely responsible for all expenses related to the prize, including without limitation any and all local, state, and federal taxes. The Winner shall not transfer assignment of the prize to others nor shall the Winner request the cash equivalent or prize substitution. By accepting the prize, the selected Winner grants permission for the Sponsor to use the Winner’s likeness, entry, and name for purposes of advertising and trade without compensation unless prohibited by law. 
 <li>Odds. The total number of eligible entries received determines the odds of winning.
 <li>Selection and Notification of Winner(s). The Winner(s) of the Grand Prize and the First Prizes will be selected at random. The drawing from among eligible entries will take place on December 18, 2023 at 3:00 p.m. Central Time. Winner(s) will be notified by email. Winner(s) must acknowledge receipt of notification and acceptance of the prize as directed by Sponsor within forty-eight (48) hours of notification. Winner(s) may be required to complete an affidavit of eligibility and liability/publicity release form (except where prohibited by law) (collectively, "the Prize Claim Documents") which must be returned as directed by Sponsor within the timeframe given. Awarding of a prize is subject to verification of a potential Winner’s eligibility and full compliance with these Official Rules, in the sole discretion of the Sponsor. The Sponsor is not responsible for nor shall have no liability for Winner’s failure to receive notices due to email security settings that may cause notifications to be marked as spam or junk email. Nor shall Sponsor be liable for the Winner’s provision of incorrect or otherwise non-functioning contact information. If the Winner 1) fails to respond to the notification message within 48 hours of the notice, 2) is found ineligible, or 3) does not complete and return the Prize Claim Documents within the specified timeframe, at the Sponsor’s sole discretion, the prize may be forfeited and an alternate Winner may be selected at random. Receipt of the prize (offered in the Sweepstakes) by the Winner is upon the condition of compliance with any and all federal, state, and local laws and regulations. IF THE WINNER VIOLATES ANY OF THESE OFFICIAL RULES, THE WINNER (AT THE SPONSOR’S SOLE DISCRETION) WILL BE DISQUALIFIED, AND ALL PRIVILEGES AS WINNER WILL BE IMMEDIATELY TERMINATED. 
 <li>Rights Granted by You. By submitting an entry (e.g., photo, video, email, etc.) into the Sweepstakes, where permitted by law, You hereby irrevocably and in perpetuity grant to Sponsor, and those acting under Sponsor’s authority, the unrestricted, absolute, perpetual, worldwide right and license to use Your name, address, photograph, likeness, voice, biographical and personal information, statements, Sweepstakes application, and any photograph, film, video, audio recording or other recording taken of You or such materials (collectively, “Content”), and all in connection with marketing purposes including without limitation the promotion of the Sweepstakes and other sweepstakes and contests or the provision of publicly available Winners lists (“Promotion”), and to reproduce, copy, modify, create derivative works of, display, perform, exhibit, distribute, transmit or broadcast, publicly or otherwise, or otherwise use and permit to be used, the Content or any part thereof, whether alone or in combination with other materials (including but not limited to text, data, images, photographs, illustrations, and graphics, video or audio segments of any nature), in any media whatsoever in connection with the Promotion, and all the foregoing without any compensation, royalties, remuneration or consideration to You or any third party, and You hereby waive all claims to compensation, royalties, remuneration, consideration, notice or permission in connection therewith. 
 <li>Terms & Conditions. In its sole discretion, the Sponsor reserves the right to modify, suspend, cancel, or terminate the Sweepstakes should non-authorized human intervention, a bug or virus, fraud, or other causes beyond the Sponsor’s control, impact or corrupt the security, fairness, proper conduct, or administration of the Sweepstakes. The Sponsor, in the event of any of the above issues, may determine the Winner based on all eligible entries received prior to and/or after (if appropriate) the action taken by the Sponsor. Entrants who tamper with or attempt to tamper with the operation or entry process of the Sweepstakes or violate these Terms & Conditions will be disqualified by the Sponsor in its sole discretion. In its sole discretion, the Sponsor has the right to maintain the integrity of the the Sweepstakes, to void votes for any reason, including, but not limited to: multiple entries from the same user; multiple entries from the same computer beyond the number allowed by the Sweepstakes rules; or the use of bots, macros, scripts, or other technical means for entering. Attempts by any entrant to deliberately damage any website or undermine the legitimate operation of the Sweepstakes may be a violation of criminal and civil laws. If any such attempt is made, the Sponsor reserves the right to seek damages to the fullest extent permitted by law.
 <li>Limitation of Liability. Your entry into the Sweepstakes constitutes Your agreement, on behalf of Yourself, Your heirs, executors and administrators, to release, forever discharge, and hold harmless the Sponsor and any other party associated with the development or administration of the Sweepstakes, and their respective parent, subsidiary, or affiliated entities, and their respective officers, directors, members, shareholders, employees, independent contractors, agents, representatives, successors and assigns (collectively, “Sweepstakes Entities''), from and against any and all liability for any and all indirect, incidental, consequential or punitive damages, costs, expenses, claims (including without limitation third party claims), injuries or losses (“Damages”) arising from or relating to, in whole or in part, the Sweepstakes, including without limitation in connection with applications and the prize, including without limitation in connection with: (a) technical, printing, typographical, human or other errors, (b) applications or data being lost, corrupt, misdirected, stolen, lost, late, damaged, incomplete, mutilated or illegible, (c) hardware, software, browser, computer, server, or network failure, malfunction, congestion, delay, error, or incompatibility, or (d) any application not being accepted on account of any of the foregoing. You agree that in all cases the Sweepstakes Entities’ maximum aggregate liability shall be limited to Your direct costs of entering and participating in the sweepstakes, and in no event shall the Sweepstakes Entities be liable for any attorneys fees.
 <li>Disputes. THE SWEEPSTAKES IS GOVERNED BY THE LAWS OF THE UNITED STATES OF AMERICA AND THE STATE OF CALIFORNIA, WITHOUT RESPECT TO CONFLICT OF LAW DOCTRINES. You agree, as a condition of participating in this promotion, that if any disputes cannot be resolved between You and the Sponsor, and if causes of action arise out of or are connected with this Sweepstakes, they shall be individually resolved exclusively before a court located in California having jurisdiction, without resorting to any form of class action. Under no circumstances in any such dispute shall the participant be permitted to obtain awards for, and hereby waives all rights to, punitive, incidental, or consequential damages, including reasonable attorney’s fees, other than participant’s actual out-of-pocket expenses (i.e. costs associated with entering this Sweepstakes). The participant waives all rights to have damages multiplied or increased. 
 <li>Privacy Policy. Information submitted with an entry is subject to the Sponsor’s Privacy Policy. Please visit the Sponsor’s website to read the Privacy Policy at http://www.unison.com/legal/. 
 <li>Winners List. You may obtain a copy of the Winner’s name(s) or a copy of these Official Rules, by sending your request via email to sweepstakes@unison.com.
 <li>Social Media Rules. The Sweepstakes is in no way sponsored, endorsed, administered by, or associated with Facebook, Instagram, or any other social media platform. You understand that you are providing your information to Sponsor and not Facebook or Instagram. 

By entering the Sweepstakes, You (the entrant), have affirmatively reviewed, accepted, and agreed to all of the Official Rules.

Just as we were encouraged to create holiday wish lists as children, we welcome our homeowners to complete a short survey.

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