Our Chief Investment Officer, Matt O’Hara, recently published an article as a member of Forbes Finance Council. In "7 Ways to Tap Into Your Home's Equity," he describes "the ever-evolving landscape of home financing," exploring both traditional options and newer equity sharing alternatives. Read the article <a href="https://www.forbes.com/councils/forbesfinancecouncil/2024/11/14/home-financing-7-ways-to-tap-into-your-homes-equity/">here</a>.

AdobeStock 204566991

Our Chief Investment Officer recently published an article as a member of Forbes Finance Council: "7 Ways to Tap Into Your Home's Equity."

Unison on Forbes Council: 7 Ways to Tap Into Your Home's Equity 

by Jian Tong Chua, Quantitative Research Associate, and Winfield Xu, Director of Data Science 

 The 2024 housing market has demonstrated significant growth and resilience, overcoming headwinds from high interest rates to achieve a remarkable surge in home equity. This annual report examines key trends in home equity throughout the year, analyzing both national and regional data to provide a comprehensive overview of the market. 

Home prices have reached record highs, with the past 12 months showing significant home price appreciation. As of July 2024, the national Case-Shiller Index reported a 4.5% <a href="https://fred.stlouisfed.org/series/CSUSHPINSA">year-over-year increase</a>. Much of this growth occurred in the first half of 2024, with the index rising by 4.7% year-to-date. 

This surge in home values has substantially boosted homeowner equity. Home equity, defined as the difference between a property's market value and the outstanding mortgage balance, has reached new heights. By the end of Q2 2024, Federal Reserve <a href="https://fred.stlouisfed.org/series/OEHRENWBSHNO">data</a> indicated total homeowner equity across the country had risen to $35 trillion, with the aggregate value of homes surpassing <a href="https://fred.stlouisfed.org/release/tables?rid=52&eid=810420#snid=810447">$48 trillion</a>. 

<img src="https://images.ctfassets.net/qppku9ygnsbb/596Cjk2NNBP0ARSHnEA6Ga/385a87c937c66794e1739035059d1eca/Home_Equity__Value___Mortgage.png"> 

<h3>Performance Distribution</h3> 

While aggregate home equity has increased at the national level, there are significant variations across states and metropolitan areas. 

<img src="https://contentimages.o-prod.unison.com/images/Map.png">
 

From September 2023 to September 2024, median home equity growth was positive in 45 out of 50 states. Connecticut (24.6%), New Jersey (22.3%), and Delaware (18.3%) experienced the highest growth in home equity, while Mississippi (-2.1%), Louisiana (-3.9%), and Idaho (-6.5%) saw the largest declines. 

 <img src="https://images.ctfassets.net/qppku9ygnsbb/3e68upvrnCBsmQLrvfAilu/49fc44b83733e5d20f69ca1279069de7/Median_home_equity_YoY_growth_by_state.png"> 
 In dollar terms, Hawaii and California stand out as significant outliers in median home equity, with values of $564,728 and $497,558, respectively—nearly 30% higher than Massachusetts, which ranks third. On the other end of the spectrum, Oklahoma recorded the lowest median home equity at $118,331, amounting to just a fifth of the highest state. 
 <img src="https://images.ctfassets.net/qppku9ygnsbb/3VjoEYt4CrmYDRjI2TNcfE/0fb9287e5167a3e50a887ce662ec6d88/Median_HE_by_state.png"> 

 At a more granular level, Core Based Statistical Areas (CBSAs) also showed notable differences in home equity performance. Dover, Delaware emerged as the top-performing CBSA, with an impressive 35.7% year-over-year increase in home equity. Two CBSAs in New Jersey, Trenton-Princetron and Atlantic City-Hammonton also performed well, rounding out the top 3. 
 <img src="https://images.ctfassets.net/qppku9ygnsbb/43Vn4AkIHRtibjg77MIjKk/693e1dfc3c2850f034d86f785b3dcd76/Top_MSAs_in_median_home_equity_YoY_growth.png"> 

In contrast, CBSAs in New Mexico experienced the steepest declines. Espanola recorded the largest year-over-year drop at 43.5%, followed by Portales (-32.5%) and Carlsbad-Artesia (-32.2%). 
<img src="https://images.ctfassets.net/qppku9ygnsbb/PUuz5JzyF9ZWaefKzrhJH/d60a51d5c31b40173b06cfd7374c571d/Bottom_MSAs_in_median_home_equity_YoY_growth.png"> 

 Even greater disparities emerge when examining median home equity levels. The Jackson Micropolitan Statistical Area, spanning Wyoming and Idaho, boasts the highest median home equity in the country at $1,562,4406. 

<img src="https://images.ctfassets.net/qppku9ygnsbb/1Zq6IhhudG746DXIgEr1Dt/a9cfa351c8f6d259d1874526f1e30f4a/Top_MSAs_in_median_home_equity.png"> 

In fact, the highest median home equity in the country is more than twenty times that of the lowest, which is Pampa, Texas at $71,9837. 

<img src="https://images.ctfassets.net/qppku9ygnsbb/3dlYV7e6nPZeKV8eTv9g6G/35e36260aabd37da77535da371848c90/Bottom_MSAs_in_median_home_equity.png"> 

<h3>What does this mean for homeowners?</h3> 

For most U.S. households, their primary residence is likely their
largest asset. With the strong growth in home prices over the past
few years, home equity has become an increasingly significant
portion of household net worth. As of July 2024, home equity
accounted for more than one-fifth of total household net worth. 

<img src="https://images.ctfassets.net/qppku9ygnsbb/5YH6H49fRrb53C4fwg6ZpM/31f0f05aa026a4533e3ae5da0267b4ba/Home_equity_share_of_household_net_worth.png"> 

While future home price trends are difficult to predict, the recent rapid pace of price appreciation is historically
uncommon. Over the past three years, the national Case-Shiller Index has increased by more than 14%, a rate
of growth seen only about 7% of the time in the index's history. Given this exceptional performance,
homeowners may want to consider realizing some of these gains, especially if they have liquidity needs. 

<img src="https://images.ctfassets.net/qppku9ygnsbb/4vw69IHiT277isEQscWitA/c451abdcc649f7a70c18f45e9fae5a08/Case_Shiller_national.png"> 

Unlike more liquid assets like stocks or bonds, home equity is especially challenging to access. Homeowners
typically have three main options for withdrawing equity: cash-out refinancing, home equity loans, or home
equity lines of credit (HELOCs). Over the past year, there has been an <a href="https://fred.stlouisfed.org/series/RHEACBW027NBOG">increase in HELOC activity</a>, possibly
driven by recent interest rate cuts and the growing awareness among homeowners of the significant value they
can tap into for liquidity. 

<img src="https://images.ctfassets.net/qppku9ygnsbb/2u92xYi2pMml8jOQCZr7rR/6676362be91716be4a360f663b18dcb3/Revolving_home_equity_loans__all_commercial_banks____Billions_.png"> 

A key distinction between accessing home equity through a HELOC or refinancing versus selling a portion of a
retirement portfolio is that HELOCs and mortgages create debt. While these options provide short-term
liquidity, they also come with the long-term obligation to service the debt.
In recent years, payments on both consumer and mortgage debt have <a href="https://www.federalreserve.gov/releases/dsr/">risen</a> as a percentage of disposable
(after-tax) income. 

Therefore, while HELOCs offer an appealing way for homeowners to unlock liquidity, it’s
essential to consider whether they have the capacity to manage the ongoing payments that accompany this
debt. 

 <img src="https://images.ctfassets.net/qppku9ygnsbb/53l67ZbnSQsIfJ5IeT8Bn/2699a746c9ba54e7cde999fa12aca782/Consumer_and_mortgage_debt_to_disposable_income_ratio.png"> 

 Within the evolving home equity market, <a href="https://unison.com/home-loan">Unison's Equity Sharing Home Loan</a> offers a compelling alternative to
traditional second mortgages and HELOCs, particularly in key markets that have seen substantial increases in
home equity. The Equity Sharing Home Loan is currently offered in Florida, Colorado, Utah, Arizona, and
Oregon - states that have experienced median home equity growth of 9.1%, 3.7%, 1%, 0.2%, and -0.9%
respectively over the past year. 
The Equity Sharing Home Loan combines the benefits of both debt and equity, allowing homeowners to borrow
against their home equity at competitive rates and pay half as much each month as they would with the
competition--starting as low as $455 on a $100,000 loan in November 2024. Unlike standard refinancing,
the distinct structure includes interest-only payments for up to 10 years, providing immediate access to
funds without the financial strain of high monthly costs. Additionally, homeowners can defer a portion of their
payments until the end of the loan term, giving them flexibility without prepayment penalties. This
structure bridges the gap between homeowners' need for accessible capital and their wealth locked in
home equity. It provides liquidity without the higher payment burden typical of traditional home equity
products. 
 For questions about this report, email <a href="mailto:mediadesk@unison.com">mediadesk@unison.com</a> or visit our website at <a href="https://unison.com">unison.com</a>.

Screenshot 2024-12-02 at 2.11.05 PM

2024 Home Equity Report | Unison

A reverse mortgage is a convenient way to <a href=”https://www.unison.com/blog/what-is-home-equity-and-how-to-use-it/”>use your home equity</a> as a cash source during retirement, but there are some <a href=”https://www.unison.com/blog/reverse-mortgage-pros-and-cons/”>downsides to a reverse mortgage</a>. Before committing to this home loan option, it's important to familiarize yourself with the dangers of reverse mortgages and learn how to lessen those risks. 
<ul>
<li><a href=”#Understanding”>Understanding Reverse Mortgages
</a>
<li><a href=”#KeepinMind”>What to Keep in Mind with a Reverse Mortgage</a>
<li><a href=”#ADifferentOption”>An Alternative to Reverse Mortgages</a>
</ul>
 

<a id=”#Understanding”><h2>Understanding Reverse Mortgages</h2></a>
Reserved for homeowners over the age of 62, a <a href=”https://www.unison.com/blog/reverse-mortgage-payments-costs/”>reverse mortgage</a> is a home loan that allows you to turn part of your equity into accessible cash without having to sell your property. Unlike a traditional mortgage, where a borrower makes payments to the lender, a reverse mortgage requires the lender to make payments to the borrower. 

You can choose to receive your funds through monthly payments, a lump sum of cash, a line of credit, or a combination of these options. Repayment on a reverse mortgage loan is due when you move out of your home, sell your home, or pass away. 

Considering the age requirement, reverse mortgages are normally used as a supplementary income source during retirement to help cover medical costs, living expenses, and other financial needs.
 

<a id=”#KeepinMind”><h2>What to Keep in Mind with a Reverse Mortgage</h2></a>

It’s important to consider all aspects of a reverse mortgage if you’re thinking about obtaining one. Be aware of some of the potential downsides and utilize these tips. 

<h3>It May Be Tempting to Misuse Funds</h3> 
Not all reverse mortgage dangers are unique to this loan. A downside that comes with reverse mortgages, along with many other types of loans, is that it can be tempting to overspend. With such a large sum of money available to you, it could be easy to lose track of how much you're borrowing. 
 

<h3>You Could Lose Your Home in a Foreclosure</h3> 
As with other equity-based <a href=”https://www.unison.com/blog/reverse-mortgage-alternatives/”>reverse mortgage alternatives</a>, losing your home is the biggest risk of a reverse mortgage. Unexpected financial burdens like rising interest rates or healthcare costs could make it more difficult for you to make payments. And if you fail to pay property taxes, insurance fees, or other home-related costs outside of the loan, your house could be foreclosed. While you never know if these events will happen to you, it's still important to add some cushion into your budget just in case. 

<h3>You Could Be Swimming in High Upfront Costs</h3> 

Another reverse mortgage downside is that you'll face higher origination fees than you would with a traditional mortgage. So, you'll have to scrounge up enough funds to pay the upfront charges. But if you're taking out a reverse mortgage for quick access to extra cash, you might not be in the financial position to afford such a hefty payment, creating a major barrier to entry. 

<h3>Your Budget Might Collapse Under Variable Interest Rates</h3> 

Reverse mortgages can come with interest rates that fluctuate if they have a variable, rather than fixed rates. In that case, should rates continue to rise over time, homeowners may face less borrowing potential and more financial strain. This means your loan balance could grow significantly by the end of your loan term. So, if your budget is tight, a reverse mortgage with variable rates may not be worth the unpredictability. 

<h3>You’ll Own Less Equity in Your Property</h3> 

Borrowing against your equity decreases the amount of equity you have in your home. This is one of the biggest problems with reverse mortgages, as you could be left with less to pass on to your heirs. Another negative effect of reduced home equity is that it could limit your options if you want to downsize later. 

<h3>Shop Around for Lenders</h3> 

Before you take out a reverse mortgage, look into multiple lenders and carefully consider their costs, repayment plans, and other terms. Find one that fits your needs and has terms you feel comfortable with based on your budget. Once you find the right lender, be sure to work with them to land on a custom plan that's best for you. 

<h3>Know Your Loan Options </h3> 

There are three main types of reverse mortgages: 
<ol>
<li>Home Equity Conversion Mortgages (HECMs): Most common and federally-insured
<li>Proprietary Reverse Mortgages: From private lenders and best for homes appraised at high values
<li>Single-Purpose Reverse Mortgages: From government and nonprofits, often the least expensive, and carry more limitations
</ol> 
Different costs and terms are associated with each of these loan options, so research them all to figure out which is right for you, your home, and your financial situation.
 

<h3>Trust the Experts</h3> 
If you're still on the fence about taking out a reverse mortgage, get some advice! A good financial expert can advise you on the investment options that are suited for your circumstances. You can also take reverse mortgage counseling classes to gain more information. 

<h3>Set a Realistic Budget & Safety Net</h3> 

If you're particularly worried about the risk of overspending, have a backup plan. An emergency fund set aside to cover unexpected costs can potentially help you use less of your home loan over time. Taking a close look at your budget and ensuring it's realistic can also help you manage your funds well. 

<h3>Borrow Only What You Need</h3> 

The best way to avoid the reverse mortgage risk of overspending is to only borrow what you need. Rather than pulling out excess cash to have as a backup, stick to the amount that covers only the essentials so you're never tempted to overspend. 

<a id=”#ADifferentOption”><h2>An Alternative to Reverse Mortgages</h2></a>

A reverse mortgage comes with a variety of risks, and it's not the right choice for everyone. If you don't meet the reverse mortgage requirements or you want a <a href=”https://www.unison.com/blog/alternative-ways-to-get-equity-out-of-home/”>home equity alternative</a>, consider Unison's <a href=”https://www.unison.com/blog/introducing-unison-equity-sharing-home-loan/”>Equity Sharing Home Loan</a>. 

The Equity Sharing Home Loan is an interest-only, ten-year second mortgage with a shared appreciation component that offers homeowners the opportunity to tap into their equity with low monthly payments. With partially-deferred interest and below-market rates, Unison designed the loan to offer more flexibility for homeowners when it comes to managing their monthly finances. In fact, your monthly payments could be as low as half of what they would be with a traditional equity financing option, such as a HELOC. 

If you’re looking for a way to tap into your equity but keep your monthly obligation low, <a href=”https://unison.com/home-loan”>learn more</a> about Unison’s Equity Sharing Home Loan 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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Is a reverse mortgage a good idea? Learn about the potential downsides of a reverse mortgage and find out what you can do to protect yourself.

The Potential Downsides of a Reverse Mortgage | Unison® Equity Sharing | Blog

By Lauren Rosales-Shepard, Content Writer 

During the peak of the <a href="https://www.unison.com/blog/undefined/covid-wfh-part-one">COVID pandemic</a>, many of us were stuck at home. It’s no surprise that, given all this extra time in our houses, there was a resultant surge in home renovations and expansion. However, borrowing costs soon skyrocketed. This slowed home sales and made it prohibitively expensive to tap into home equity to fund larger projects with traditional loan products like a HELOC. 

That’s about to change. 

The Wall Street Journal is <a href="https://www.wsj.com/economy/housing/home-renovation-loans-2025-858e386d">forecasting</a> that remodeling was not merely a COVID phase, but is ramping again. According to a prediction made by Harvard’s Joint Center for Housing Studies and its Leading Indicator of Remodeling Activity, the annual spending will <a href="https://www.wsj.com/livecoverage/stock-market-today-dow-sp500-nasdaq-live-10-17-2024/card/remodeling-spending-forecast-to-rebound-next-year-5vYJnzcC4aSF1SIaUCz1?mod=article_inline">increase to $477 billion</a> in the first nine months of 2025, nearing the record of $487 billion for all of 2023. 

More evidence of the resurgence is a recent survey of 475 households, most of which claimed to be waiting for lower rates to use home-equity lines of credit to fund projects. The senior vice president of building products research at John Burns Research & Consulting estimates that this number is just the beginning; he suggests that there is about $30 billion in remodeling spending just waiting for the right moment. 

That moment may be now. Those who bought homes with historically low mortgage rates during the pandemic aren’t likely to move–perhaps ever–which increases the likelihood that they will renovate or expand instead. Now that the Fed has recently lowered interest rates, households may be poised to tap into their equity to fund new projects. 

One very popular new housing project is the construction of <a href="https://www.unison.com/blog/homeownership/what-are-adus">“Accessory Dwelling Units”</a> (ADUs). Also commonly referred to as a “granny house” or “backyard cottage,” an ADU is an additional, self-contained living space attached or adjacent to the primary house on a single family residential lot. Traditionally, as the nickname “granny house” implies, these types of units were often utilized by family members in a multi-generational household. However, in California, <a href="https://therealdeal.com/magazine/november-2024/granny-flats-get-a-glow-up/">recent legislation</a> has both enabled and encouraged the construction of ADUs as rental properties–or even <a href="https://www.planetizen.com/news/2024/08/131136-san-jose-homeowners-can-now-sell-adus-condos">sellable condos</a>. In 2023, Los Angeles County alone permitted <a href="https://www.latimes.com/california/story/2024-07-30/la-is-the-epicenter-of-the-adu-boom-these-surprising-cities-are-building-the-most">more than 45,000</a> ADUs. 

Why the rising popularity? On the one hand, maintaining an ADU as a rental or even an AirBnb means additional, and eventually passive, income. But there are more wide-ranging benefits as well. ADUs are <a href="https://www.nar.realtor/magazine/real-estate-news/commentary/the-eco-friendly-adu-housing-s-game-changer">inherently sustainable</a>, as they are built on existing properties (particularly in urban areas) and therefore don’t contribute to sprawl. Plus, given their compact size, ADUs take fewer raw materials to build, conserving resources. These units are also seen as a way to <a href="https://www.marketwatch.com/story/adus-are-key-to-solving-the-housing-crisis-heres-what-to-know-b40c7672">mitigate the housing shortage</a>. States like <a href="https://states.aarp.org/massachusetts/adus-by-right-are-now-the-law-in-massachusetts-gov-healey-signs-aarp-backed-housing-bill">Massachusetts</a> and <a href="https://coloradonewsline.com/2024/08/12/colorado-law-opens-doors-wider-adu/">Colorado</a> have followed California’s example, paving the way for more homeowners to develop these small units on their land. 

Though a <a href="https://www.latimes.com/california/story/2024-09-19/pilot-program-offers-long-beach-homeowners-low-interest-loans">pilot program in Long Beach</a> is offering $250,000 in low-interest loans to build ADUs, most homeowners are turning to their built-up equity to provide the necessary funds for construction. 

<h3>A New Equity Financing Option: the Unison Equity Sharing Home Loan</h3> 

When it comes to accessing home equity, there is now an additional option. Unison recently launched the Equity Sharing Home Loan, a ten-year fixed, interest-only second mortgage designed specifically to offer homeowners flexibility in their finances via low monthly payments. Through partially-deferred interest and a shared appreciation component, the Equity Sharing Home Loan endeavors to provide below-market rates that enable homeowners to save each month. 

When it comes to renovating or remodeling, the Equity Sharing Home Loan has a particular feature of interest. The Capital Improvement Adjustment is available three years into the loan term, and is intended to offer the homeowner, if they make improvements to the home that boost its value (beyond regular maintenance), the opportunity to apply to maintain all the benefits. In other words, the value added by these improvements would not be part of the future shared appreciation. 

If you’re one of the many homeowners contemplating a renovation project, but hoping to keep your monthly payments low, <a href="https://unison.com/home-loan">learn more</a> about Unison’s Equity Sharing Home Loan today and get a rate estimate with 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.

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Renovations are on the rise! Learn more about the upward swing, and the burgeoning Accessory Dwelling Unit trend in this blog post. 

Renovations are on the Rise, and With Them, ADUs | Unison Equity Sharing

by Lauren Rosales-Shepard, Content Writer 

So, you’re in the market for a loan. You know it’s important to do your research and shop around. While you’re undertaking that research, though, and doing that shopping, you continuously encounter interest rates and APR. What’s the difference? And what do they really mean, functionally, for your budget, your spending? 

As you’re probably aware, an interest rate is the proportion of a loan charged to you, the borrower; it’s typically articulated as an annual percentage of the loan outstanding. When you take out a loan, you ultimately pay back the amount that you borrow, plus the interest–usually in the format of monthly payments. Interest rates can be fixed (which is exactly what it sounds like; the rate does not change), or variable (the rate can change, based on market conditions). 

APR is the acronym for “Annual Percentage Rate.” Essentially, it’s meant to represent the total annual cost of a loan, from the interest to the portion of the principal being paid, as well as fees. There’s a typical equation used to calculate APR: 

 (((Interest charges + fees) ÷ Loan amount) ÷ Number of days in loan term x 365) x 100 

But–good heavens!--that’s a lot to process. The Truth in Lending Act requires lenders to do the calculation for you, and to disclose it whenever they offer you credit, or even display an interest rate. The idea is that an interest rate doesn’t tell the whole story, and consumers are therefore protected against being surprised by any extra fees. 

That’s all well and good. But, you might ask, how much am I actually going to pay? 

<h2>Limitations of APR</h2>

First thing’s first, APR isn’t perfect. The lenders have a fair amount of leeway when it comes to selecting the fees to include in its calculation. You may be missing any fees from appraisals or titles, to credit reports or document preparation. Plus, APRs were largely designed for longer-term loans, like a first mortgage. As you might imagine, the average annual impact of mortgage closing costs is much smaller when those costs are assumed to have been spread over 30 years instead of 7 to 10 years. APR also might not accurately reflect your actual repayment behavior. Because it assumes a “standard” repayment plan, if a borrower should make extra payments, or perhaps pay less frequently than monthly, the true cost of borrowing won’t be represented by the APR. 

<h2>Monthly Payments</h2>

If you’re looking to understand just how much of your monthly paycheck is going to go towards a loan, it makes sense to focus on the actual monthly payment. With most loans, this will be a percentage of the principal, as well as interest. However, some borrowing products have a more unique payment structure. 

Take Unison’s <a href="https://unison.com/home-loan">Equity Sharing Home Loan</a>. It’s a ten-year, fixed, interest-only loan with a shared appreciation component. In terms of the monthly obligation, homeowners have the option to partially-defer the interest payment to the end of the loan. Unlike standard refinancing, the Equity Sharing Home Loan allows homeowners to borrow against their home equity at below-market rates while keeping monthly payments low—starting as low as $455 on a $100,000 loan*. 

Unison created the Equity Sharing Home Loan specifically to offer homeowners an alternative to traditional home equity financing that provided more flexibility in their monthly spending. If you want to save more money each month to put towards your goals, <a href="https://unison.com/home-loan">learn more</a> about the Equity Sharing Home Loan today. 

*For well qualified customers and based on current interest rate as of October, 2024. Rates subject to change. Other terms and conditions may apply.

 
 
 
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.

Couple discussing APR vs Monthly Payments

APR-vs-Monthly-Payments

When shopping for a loan, you'll encounter interest rates and APR. But what will you actually pay each month? This post explains APR and suggests that monthly payments may be a better indicator of actual cost.

APR vs Monthly Payments | Unison Home Equity Sharing

by Lauren Rosales-Shepard, Content Writer 

Introduction 

	Credit cards have undeniably become an integral part of our financial lives. According to the Federal Reserve, <a href="https://www.forbes.com/advisor/credit-cards/credit-card-statistics/">82% of adults</a> in the United States had at least one credit card in 2022. They are so ingrained in our culture, in fact, that many banks now offer specific <a href="https://www.fool.com/the-ascent/credit-cards/best-kids-credit-cards/">credit cards for children</a> and teenagers–ostensibly, to get a head start in learning financial literacy and building good credit. But why do we as a society seem to like credit cards quite so much? Sure, they’re convenient. Cash is not always practical to carry in large quantities; plus, credit allows consumers to make purchases <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=653382">in accordance with their long-term incomes</a>, rather than weekly, or bi-weekly, paychecks. 

	Perhaps on the surface, none of this seems like a problem. During the COVID pandemic, for example, the ability to pay without handling the same bills and coins that countless others had been touching was seen as positive. Cash is hardly sanitary! Plus, with the advent of e-commerce, where it is impossible to pay with cash, small online businesses can thrive, and consumers no longer need to live in a large city to have access to the same products. However, easy is not always equal to ‘good.’ The pleasurable feelings that accompany credit card use can also <a href="https://journals.sagepub.com/doi/abs/10.1177/0972262920981428?journalCode=visa">drive compulsive behavior</a> and addiction, so that the convenience factor becomes much more disquieting. And the ‘invisibility’ of cash when cards are used also leads users to spend more–sometimes <a href="https://www.forbes.com/advisor/business/software/people-twice-likely-spend-using-card-than-cash/">twice as much</a>! Out of sight, out of mind. 

	Therein lies the muddle. In America, credit card debt is currently up more than 12% compared to last year, totalling <a href="https://www.nerdwallet.com/article/credit-cards/average-credit-card-debt-household">more than $1.2 trillion</a>. In other words, the debt is nearly as pervasive as the use. In this report, we will offer an overview of the state of credit card debt in America and try to answer several questions that arise in the process. 

Credit Card Debt in the U.S. 

	We’ve established the popularity of credit cards, and the fact that the ‘buy now, pay later’ mentality is a major factor contributing to that popularity. However, for a large percentage of Americans, ‘pay later’ doesn’t mean at the end of the month, when the bill comes due. A recent <a href="https://www.bankrate.com/finance/credit-cards/credit-card-debt-report/">BankRates credit card debt survey</a> reveals that 54% of adults carrying a credit card balance have had the debt for less than two years, and one in five reported that they’d had a balance for more than five years–half a decade. Fewer than half of the respondents claimed to have a plan to pay off the debt. This dispiriting data coincides with an online <a href="https://www.nerdwallet.com/article/credit-cards/average-credit-card-debt-household">survey commissioned by NerdWallet</a> in November 2023; among those who reported currently having revolving credit card debt, a hefty one-third admitted that they’ll probably always have some balance carried over from month to month. Just how much debt are we talking about? A <a href="https://www.experian.com/blogs/ask-experian/state-of-credit-cards/">study by Experian</a> found that the average credit card balance among consumers in Q3 2023 was $6,501–exactly 10% more than the previous year. 

Meanwhile, the interest owed accrues. A 2022 analysis from the Federal Reserve found interest accounts for <a href="https://www.cnet.com/personal-finance/credit-cards/features/maxed-out-inside-americas-credit-card-debt-crisis-and-what-we-do-next/">80% of total credit profitability</a>–in fact, in that year, credit card borrowers were charged a staggering $105 billion in interest. What is possibly most alarming is that a BankRates survey last year found that 43% of cardholders with debt <a href="https://www.bankrate.com/finance/credit-cards/more-americans-carrying-debt-and-many-dont-know-apr">don’t actually know how</a> much interest they’re paying. This lack of knowledge makes a kind of sense; in the same way that credit cards hide the reality of the amount of money one spends, interest charges are likewise invisible. 

The results of this overwhelming debt are manifest. One–perhaps obvious–consequence is the immense amount of stress that plagues the affected consumers. In the abovementioned <a href="https://www.nerdwallet.com/article/credit-cards/average-credit-card-debt-household">NerdWallet survey</a>, 27% of those surveyed with credit card debt said it’s their number one stressor, and a whopping 22% (nearly a fourth!), claimed that they felt “defeated” by their debt. A slightly less apparent result is that many are being forced to pay down their debt in a never ending battle–at the expense of their emergency savings. According to BankRates annual “Emergency Savings Report,” published in March 2024, <a href="https://www.usatoday.com/story/money/2024/03/10/credit-card-debt-swamps-savings/72894537007/">more than two-fifths</a> of adults said they lacked the savings to cover an emergency expense of $1,000 or more. In fact, the same report finds that 36% of U.S. adults have more credit card debt than emergency savings–the highest since BankRates started asking in 2011. These statistics paint a bleak picture of American consumers, one where they occupy a vulnerable position in which their debt is preventing them from building a financial contingency plan. If anything should go wrong, they will only end up digging themselves deeper into that same debt. 

So, how exactly did this happen? There is something inherently seductive about the “'buy now, pay later' philosophy” that credit cards embody which goes <a href="https://www.degruyter.com/document/doi/10.1515/semi.1992.91.1-2.99/html">beyond mere utility</a> and convenience. One <a href="https://mitsloan.mit.edu/experts/how-credit-cards-activate-reward-center-our-brains-and-drive-spending">MIT study</a> found that using a credit card can exploit reward networks of the brain–and, the more we use them, the more we condition ourselves to enjoy the experience. Paying with a credit card feels good. This occurs on a purely neurological level–when we make a purchase with a credit card, additional studies have noted <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7892835/">strong activation in the striatum</a>–a critical component of the reward system in the brain. Not to mention, at the end of the day, paying with a credit card simply <a href="https://www.nerdwallet.com/article/credit-cards/credit-cards-make-you-spend-more">feels less ‘real’</a> than cash; you aren’t counting it out, bill by bill, and the experience of purchasing is self-contained, limited to the fun part. And if you combine the convenience of paying with a credit card with this innocuous façade, you can see just how easy it is to tap into that pleasurable reward center. So, we do. 

A recent BankRates survey regarding discretionary spending discovered that 38% of adults in the U.S. are <a href="https://www.bankrate.com/credit-cards/news/discretionary-spending-survey/">willing to go into debt</a> for such non-necessities as travel, dining out, and live entertainment. In addition to which, 75% of respondents to a recent Experian survey reported that <a href="https://www.experian.com/blogs/ask-experian/state-of-credit-cards">new or increased bills</a> have impacted their ability to pay down their credit card balances. Recent events reflect this data; student loan repayments are back on (after a respite during COVID), and premiums for both home and auto insurance have increased. Plus, over the last year, inflation saw the price of goods escalate–it’s only logical that more consumers would begin to use credit cards to bridge any monthly shortfall between static income and the increased cost of living. NerdWallet’s abovementioned survey found that <a href="https://www.nerdwallet.com/article/credit-cards/average-credit-card-debt-household">nearly half</a> of Americans with revolving credit card debt (48%) say spending on necessities contributed to their balances. 

Exceedingly <a href="https://www.vox.com/the-goods/22436051/social-media-credit-card-debt-instagram-tiktok">targeted advertisements</a> have also given us more to buy in the first place, and the repetition of specific ads tailored to our preferences breeds a comforting familiarity that can be difficult to resist. That same repetition also creates and reinforces a sense of truth–i.e. you should want to achieve a specific end (wealth, beauty, status), and the item in question can help you do so. It becomes less of a suggestion and more of a fact. Obviously, the companies want you to buy their products, and credit cards, likewise, increase their profits when you do. 

Studies have shown that <a href="https://journals.sagepub.com/doi/full/10.1177/00222437211070589">low minimum payments</a> on credit cards can distract the consumer from the actual, larger balance. This is especially the case when users opt into automatic monthly payments and neglect to check the account. In such scenarios, the interest continues to rack up, and often surpasses that which the consumer would have owed in the late fees they were trying to avoid in the first place A <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/ijcs.12614">gap in financial literacy</a> has also contributed to an (incorrect) assumption that once the minimum payment is made, the user is in the clear. This misconception, however, is in the best interest of the banks and credit card companies, as they make the most profit off of the customers who pay some each month, but <a href="https://www.debt.org/credit/cards/hazards-of-paying-the-minimum-payment-on-your-credit-card/">continue to carry a balance</a>. 

Conclusion 

There are <a href="https://www.cnet.com/personal-finance/credit-cards/features/maxed-out-inside-americas-credit-card-debt-crisis-and-what-we-do-next/">well over half a billion credit card accounts</a>, according to Experian data. Through these accounts, U.S. consumers drive more than $4.5 trillion in purchases of goods and services annually. That is a lot of use, and it isn’t surprising when paired with the <a href="https://www.nerdwallet.com/article/credit-cards/average-credit-card-debt-household">survey data from NerdWallet</a> regarding credit card users with consistently revolving balances: nearly half (48%) said spending on necessities contributed to their balances, and close to a third (31%) reported the need to use a credit card to make ends meet. Perhaps most tellingly, one-third (33%) said they believe credit cards are necessary to make it in America if you aren’t rich. Ultimately, it’s clear that credit cards are here, and as a society we have made them an integral part of our financial lives. As credit cards continue to weave themselves into the fabric of our society, from such emerging features as “buy now, pay later” and Apple Pay, it’s important to remember that the benefit of convenience is also accompanied by the potential for misuse. 

 

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.

Report on Credit Card Debt

As collective credit card debt in the U.S. increases, we've written a report to explore the factors that have contributed to it, as well as its overall effect.

Report on Credit Card Debt | Unison

Recently <a href=”https://www.unison.com/blog/unison_renovation_tips/”>decide to renovate your home</a> but not sure how to pay for the home improvements? Whether you're doing seasonal upkeep or preparing to sell your property, home improvement projects can cost serious money that you might not have lying around. From traditional methods like using cash or credit cards to more unconventional options like <a href=”https://www.unison.com/blog/home_improvement_renovation_home_equity/”>tapping into equity for home remodels</a>, here are eight ways to finance home improvements.

 

<ul>
<li><a href="#Cash">Cash</a>
<li><a href=””#CashOutReFi”>Cash-Out Refinance</a>
<li><a href=”#CreditCard”>Credit Card</a>
<li><a href=”#GovtLoan”>Government Loan</a>
<li><a href=”#HELOC”>Home Equity Line of Credit</a>
<li><a href=”#HomeEquityLoan”>Home Equity Loan</a>
<li><a href=”#HomeImprovementLoan”>Home Improvement Loan</a>
<li><a href=”UnisonESHL”>Unison’s Equity Sharing Home Loan</a>
</ul> 
<a id=”#Cash”><h2>Cash</h2></a>

One of the most common ways to fund home improvements is by saving up cash. Due to the lack of interest payments and closing costs, saving is also one of the least expensive home renovation financing options. However, building up enough cash to complete all the projects around your house can be difficult if you're limited on time. 

It’s generally recommended to save <a href=”https://www.statefarm.com/simple-insights/residence/how-to-budget-and-save-for-home-maintenance”>1% to 4% of your home's value</a> for maintenance and repairs that come up, although major renovations might require additional savings. Then, with every project, set a realistic budget. If you lack the funds for a complete overhaul, prioritize only making essential repairs. Similarly, it's best to focus on improving one room at a time to avoid going over budget. 

So, should you pay cash for home improvements? Consider these pros and cons of saving money for home improvements. 

<table style="border: 1px solid black;">
<tbody>
<tr>
<td style="border: 1px solid black;">Pros</td>
<td style="border: 1px solid black;">Cons</td>
</tr>
<tr>
<td style="border: 1px solid black;">Less Costly: Cash does not accrue interest or debt and is generally a less expensive payment solution.</td>
<td style="border: 1px solid black;">Depleted Savings: Overextending on your home improvement project can cause financial issues if emergencies that aren’t budgeted for arise.</td>
</tr>
<tr>
<td style="border: 1px solid black;">No Impact on Credit: Saving up money to pay with cash will not negatively impact your credit score.</td>
<td>Delayed Start: Paying with cash requires you to wait to start renovations until after you’ve saved up the necessary amount.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Simple Payment: Using cash for home improvements is straightforward and prevents adding the burden of additional monthly payments.</td>
<td style="border: 1px solid black;">Limited Flexibility: If unexpected issues come up or a project’s scale increases, you may not have sufficient funds to cover additional expenses.</td>
</tr>
</tbody>
</table> 

<a id=”#CashOutReFi”><h2>Cash-Out Refinance</h2></a>

Cash-out refinancing is a <a href=”https://www.unison.com/blog/refinancing_tips/”>low-stress refinancing strategy</a> in which homeowners convert home equity into cash by replacing their existing mortgage with a new, larger one. The difference between these two mortgage amounts can then be "cashed out" through a lump sum payment to help you finance home improvements. 

Cash-out refis are repaid through monthly payments and are ideal for homeowners who expect to live in their homes for a long time. Although requirements can vary by lender, <a href=”https://www.unison.com/blog/how-long-to-get-cash-out-refinance/”>receiving approval for a cash-out refinance</a> typically requires a good credit score, a stable source of income, and roughly at least 20% equity in your home. 

To determine if this option is best for you, review the following cash-out refinancing pros and cons. 

<table style="border: 1px solid black;">
<tbody>
<tr>
<td style="border: 1px solid black;">Pros</td>
<td style="border: 1px solid black;">Cons</td>
</tr>
<tr>
<td style="border: 1px solid black;">Larger, Immediate Funds: Homeowners receive a lump sum (up to 80% of your home’s value) which can immediately be put toward home improvements.</td>
<td style="border: 1px solid black;">Decreased Home Equity: Replacing your previous mortgage with a new one eliminates the equity you’ve built up in your home.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Lower Interest Rates: Interest rates for mortgages are typically lower than other forms of borrowing.</td>
<td>Higher Debt: Cash-out refis are affected by market fluctuations and may lead to increased monthly mortgage payments and higher overall debt.</td>
</tr>
</tbody>
</table> 

 

<a id=”#CreditCard”><h2>Credit Card</h2></a>

When used in appropriate circumstances, credit cards can be an effective, low-cost method of paying for home renovations. Since balances must be paid off regularly, credit cards are best to use for minor repairs, cosmetic updates, minimal maintenance tasks, and other small improvements that you can easily pay off over time. This home repair finance option is also preferable for urgent projects that demand quick access to cash, but aren't substantial enough to warrant larger home repair loans. 

Most credit card companies require you to have a good/excellent credit score. To choose the best credit card for home improvements, look for favorable terms like low or 0% APR, no annual fees, and cash-back rewards. 

Here are some of the benefits and drawbacks of using credit cards to afford home renovations. 

<table style="border: 1px solid black;">
<tbody>
<tr>
<td style="border: 1px solid black;">Pros</td>
<td style="border: 1px solid black;">Cons</td>
</tr>
<tr>
<td style="border: 1px solid black;">Minimal Qualification Requirements: Besides creditworthiness, credit cards are generally easier to qualify for compared to some loans for home renovations. </td>
<td style="border: 1px solid black;">Impact on Credit Score: If you do not make minimum monthly payments, you’ll see a negative impact to your credit score.</td>
</tr>
<tr>
<td style="border: 1px solid black;">No Collateral Required: Unlike home remodeling loans that use your house as collateral, credit cards do not put your assets at risk.</td>
<td>Credit Limits Credit cards come with a maximum charge limit and may not be able to support large home renovations.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Rewards Points: Some credit cards offer cash-back rewards for home improvement purchases.</td>
<td style="border: 1px solid black;">High Interest Rates: After the introductory period ends, standard credit card rates can be significant and leads to increased debt if not properly managed.</td>
</tr>
</tbody>
</table> 

 

<a id=”#GovtLoan”><h2>Government Loan</h2></a>

The federal government provides many house renovation loans, including Title I Loans and FHA 203k rehab loans. 

<a href=”https://www.hud.gov/program_offices/housing/sfh/title/ti_abou”>Title I Loans</a> are offered by the <a href=”https://www.hud.gov/program_offices/housing/fhahistory”>Federal Housing Administration</a> (FHA) to help homeowners pay for necessary home improvements and repairs. This home improvement financing option is great for individuals who don't meet the credit or equity requirements to secure other types of loans. 

<a href=”https://www.hud.gov/program_offices/housing/sfh/203k/203k--df”>FHA 203k rehab loans</a>, on the other hand, help you buy a property that requires substantial repairs. These mortgages are insured by the FHA and allow you to work with an approved contractor to renovate parts of the property, make extensive structural repairs, or eliminate safety hazards. 

Although those with poorer credit scores are eligible for Title I loans, they often still require you to have a <a href=”https://www.unison.com/blog/what-is-good-debt-to-income-ratio/”>decent debt-to-income ratio</a>, as well as proof that you make enough money to cover the proposed payments. Qualifying for FHA 203k loans usually requires a good credit score and a <a href=”https://www.nerdwallet.com/article/mortgages/fha-203k-renovation-loan”>3.5% down payment</a>. 

Taking out a loan for home improvements comes with several advantages and disadvantages. These are the main ones. 

<table style="border: 1px solid black;">
<tbody>
<tr>
<td style="border: 1px solid black;">Pros</td>
<td style="border: 1px solid black;">Cons</td>
</tr>
<tr>
<td style="border: 1px solid black;">Fixed Interest Rates: Many government-backed home renovation loans come with fixed interest rates, so you can expect consistency to more easily budget for monthly payments. </td>
<td style="border: 1px solid black;">Limited Loan Amounts: Limits for FHA loans are lower than other forms of borrowing and may not be able to cover costly renovations.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Lower Interest Rates: Government home repair loans typically come with more competitive interest rates as opposed to traditional loans.</td>
<td style="border: 1px solid black;">Insurance Premiums: Many FHA loans come with upfront mortgage insurance costs, which add to the overall loan expenses.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Less Strict Requirements: With no equity requirement and more flexible credit requirements, government loans may be more accessible for you.</td>
<td style="border: 1px solid black;">Long Processing: Government loans can require more paperwork and longer processing times for closing compared to other types of loans.</td>
</tr>
</tbody>
</table> 

 

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

A <a href=”https://www.unison.com/blog/about-helocs/”>home equity line of credit</a> (HELOC) loan is a revolving line of credit with <a href=”https://www.unison.com/blog/home-equity-loan-heloc-application-approval-process/”>a process</a> much like a credit card. <a href=”https://www.unison.com/blog/how-does-a-heloc-work/”>HELOCs work</a> by using your home as collateral, allowing you to unlock your home's equity up to a certain credit limit in order to finance major home projects. Funds can be accessed on an as-needed basis via credit cards, electronic transfer, and/or checks. 

Once you've used up the allotted funds, you'll enter a repayment process to pay off the principal and accrued interest through monthly installments. The specific amount you can borrow through a HELOC depends on your credit score, income, and the amount of equity you own in your home. 

Check out the <a href=”Check out the pros and cons of home equity lines of credit to see if this option aligns with your goals.
“>pros and cons of home equity lines of credit</a> to see if this option aligns with your goals. 

<table style="border: 1px solid black;">
<tbody>
<tr>
<td style="border: 1px solid black;">Pros</td>
<td style="border: 1px solid black;">Cons</td>
</tr>
<tr>
<td style="border: 1px solid black;">Draw Period: During the draw period, the homeowner typically only needs to make interest-only monthly payments on the funds they access. </td>
<td style="border: 1px solid black;">Risk of Overspending: The temptation to overspend on large home improvements can result in substantial debt.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Flexible Access to Cash: You can access your HELOC funds through many means and there are few limits on how and when you can use them.</td>
<td style="border: 1px solid black;">Variable Rates: Many HELOCs have variable, rather than fixed interest rates, which can lead to unpredictability and difficulty budgeting.</td>
</tr>

</tbody>
</table> 

 

<a id=”#HomeEquityLoan”><h2>Home Equity Loan</h2></a>

Home equity loans, also known as closed end second mortgages, involve a homeowner borrowing against the equity built up in their home. Unlike other home renovation financing options, home equity loans provide a single lump sum payment with stable monthly repayment rates, ideal for large renovation projects that require a significant amount of cash on short notice. 

Qualifying for a home equity loan requires a strong credit score, a consistent source of income, a good debt-to-income ratio, and owning 15% to 20% equity in your home. 

Learn more about the main <a href=”https://www.unison.com/blog/pros-cons-home-equity-loan/”>advantages and disadvantages of home equity loans</a> if you're still on the fence about how to pay for a home remodel. 

<table style="border: 1px solid black;">
<tbody>
<tr>
<td style="border: 1px solid black;">Pros</td>
<td style="border: 1px solid black;">Cons</td>
</tr>
<tr>
<td style="border: 1px solid black;">Immediate Lump Sum: Borrowers receive a single lump sum to pay for urgent home renovation costs. </td>
<td style="border: 1px solid black;">Additional Mortgage: Home equity loans are a second mortgage payment, which can increase financial stress on homeowners who are already struggling.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Low, Fixed Interest Rates: Regardless of market conditions, home equity loans offer a fixed interest rate that’s often lower than other forms of borrowing like credit cards.</td>
<td style="border: 1px solid black;">Equity Loss: A drop in the real estate market may lead to diminished equity or even negative equity with loans exceeding your property’s value.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Predictable Repayment: With set repayment periods, you’ll be able to appropriately budget for payments and have a clear idea of what you owe.</td>
<td style="border: 1px solid black;">Risk of Foreclosure: There is a risk of foreclosure with a home equity loan in the case that you fail to make your mortgage payments.</td>
</tr>
</tbody>
</table> 

 

<a id=”#HomeImprovementLoan”><h2>Home Improvement Loan</h2></a>

As the name suggests, home improvement loans are personal loans that are specifically designed to help homeowners pay for home renovations, repairs, or remodels. Because they are unsecured, home repair loans might be the right choice for you if you prefer not to use assets, like your home, as collateral. 

These loans for home renovations are generally paid back in fixed amounts every month for a few years. To get a home renovation loan, lenders will consider your creditworthiness. This home renovation funding solution also typically requires a proof of stable income and a low debt-to-income (DTI) ratio to qualify. 

If you're wondering how to pay for home renovations without risking your house, turn to the pros and cons of home improvement loans. 

<table style="border: 1px solid black;">
<tbody>
<tr>
<td style="border: 1px solid black;">Pros</td>
<td style="border: 1px solid black;">Cons</td>
</tr>
<tr>
<td style="border: 1px solid black;">No Collateral Required:Unsecured personal loans do not use assets like cars, homes, or savings accounts as collateral, putting you at less risk. </td>
<td style="border: 1px solid black;">Higher Interest Rates: Without collateral to secure the loan, home improvement loans often have higher interest rates.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Fixed Interest Rates: Home improvement loans often come with fixed interest rates and more predictable payments.</td>
<td style="border: 1px solid black;">Strict Requirements: Requirements to get approved for a home improvement loan tend to be stricter than secured loans.</td>
</tr>
<tr>
<td style="border: 1px solid black;">Quick Funding: These loans typically have a quicker approval process, meaning you can gain access to funds more immediately.</td>
<td style="border: 1px solid black;">Borrowing Limits: The amount of money you can access through home improvement loans is often lower than other forms of borrowing.</td>
</tr>
</tbody>
</table> 

 

<a id=”#UnisonESHL”><h2>Unison’s Equity Sharing Home Loan</h2></a>

Unison’s <a href=”https://www.unison.com/blog/undefined/introducing-unison-equity-sharing-home-loan”>Equity Sharing Home Loan</a> is an interest-only, ten-year second mortgage, which innovatively combines aspects of a traditional home equity loan and Unison’s own <a href=”https://www.unison.com/blog/undefined/equity-sharing-agreements/”>equity sharing agreement</a> and empowers homeowners to tap into their equity to make home improvements. 

A shared appreciation component enables Unison to offer below-market rates*, which, with partially-deferred interest, adds up to low monthly payments for the homeowner! At the end of the loan, the homeowner pays back the principal, any deferred compounded interest, as well as a percentage of the home’s appreciation. Unison’s share in the home's future appreciation is fixed at the beginning of the origination process, and the amount is proportional to the amount of the Equity Sharing Home Loan–typically, 1.5x the percentage borrowed. For example, if you borrow 10% of your home’s current value, Unison will receive 15% of the future appreciation. 

Unison welcomes homeowners with a FICO score of 680 and above, a maximum combined loan to value ratio of 70%, and a debt-to-income ratio not exceeding 40%. 

<h3>Benefits of the Equity Sharing Home Loan</h3> 

Below-Market Interest Rates for Second Mortgages: The shared appreciation component enables Unison to offer lower rates. 
Low Monthly Payments: Enjoy flexibility with your monthly finances. You only pay up to 75 percent of your loan’s interest each month and defer the remaining 25 percent to the end of the loan. 
Flexible Terms: There is no prepayment penalty if you decide to pay off sooner. 
Hold on to Your Equity: Unison shares in a portion of the future appreciation of your home, not the equity you’ve already built. 

<a href=”https://www.unison.com/home-loan/”>Learn more</a> about the Unison Equity Sharing Home Loan today to discover how you can put your home's equity to work on financing the home renovation of your dreams. 
 

*Based on an internal analysis and review through July 2024 of interest rates for second-lien home equity loans. 

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.

A couple looking at their phone and laptop thinking about different ways to pay for home improvement. 

How to Pay for Home Improvements

Need to take out a loan for home renovations? From home improvement loans to HELOCs, here are nine of the best ways to finance home improvements & repairs, including Unison’s Equity Sharing Home Loan.

How to Pay for Home Renovations—Find the Best Loan for You | Unison

By Lauren Rosales-Shepard, Content Writer 

You’ve probably heard that your home is your most valuable asset, that you (and so many homeowners across the country) are sitting on a tremendous amount of equity. But what does that mean, exactly? And what is it good for, in practice? 

“Home equity” is the difference between the market value of your home and the amount you owe on your mortgage–i.e. subtract the amount you owe on your mortgage from your home’s current market value and, voilà, you’ve got your home equity. 

Homeownership allows you to build equity over time both as you pay down your mortgage, and property values appreciate. This equity contributes to your overall net worth; it’s a valuable asset that can provide financial security, flexibility, and opportunities for homeowners. Because home equity isn’t exactly a tangible thing, there are <a href=”https://www.unison.com/blog/alternative-ways-to-get-equity-out-of-home/”>multiple different products</a> that can help you tap into that home equity and translate it into something liquid: cash. Traditionally, homeowners have used <a href=”https://www.unison.com/blog/about-helocs/”>HELOCs</a>, <a href=”https://www.unison.com/blog/home-equity-loan-vs-heloc/”>home equity loans</a>, <a href=”https://www.unison.com/blog/cash-out-refinance-pros-and-cons”>cash-out refinances</a>, or <a href=”https://www.unison.com/blog/reverse-mortgage-payments-costs”>reverse mortgages</a> to harvest their equity. By leveraging home equity wisely and responsibly, you can maximize its potential benefits, enhance your overall financial well-being, and even build wealth. How is that? Read on to find out. 

<h2>Make Home Improvements</h2>

When you make <a href=”https://www.unison.com/blog/best-home-improvements-to-increase-value/”>strategic home improvements</a>, you can increase your home’s value. And as we described above, as your home’s value goes up, so, too, does your equity. That said, the key word here is strategic--not all renovations are equal, when it comes to adding value to a home. 

<ul>
<li>Curb Appeal: A well-maintained and attractive exterior can make a positive first impression on potential buyers and increase your home's market value. Enhancing the exterior of your home with landscaping, fresh paint, updated siding, or a new roof can all accomplish this objective.
<li>Kitchen Renovation: The kitchen is often considered the heart of the home and a key selling point for buyers. Upgrading outdated appliances, countertops, cabinets, and fixtures can modernize the space and lead to higher resale value.
<li>Bathroom Remodel: Renovating bathrooms can significantly increase your home's value. Updating fixtures, adding storage, replacing old tile, and upgrading the shower or bathtub can enhance both functionality and aesthetics. 
<li>Energy Efficiency Improvements: Installing energy-efficient features, such as new windows, doors, insulation, and HVAC systems, can reduce utility costs and increase your home's value, especially as energy-efficient homes are in high demand among buyers seeking to lower their energy bills and reduce their environmental footprint.
<li>Home Expansion or Addition: Adding square footage to your home through expansions or additions, such as a new bedroom, bathroom, or living space, can significantly increase its value. Additional square footage can improve functionality and accommodate growing families.
 <li>Basement or Attic Conversion: Finishing an unfinished basement or attic can add valuable living space to your home. Converting these areas into bedrooms, recreational rooms, or home offices can significantly increase your home's usable square footage.
<li>Maintenance and Repairs: Addressing deferred maintenance issues and making necessary repairs can help maintain your home's value and prevent depreciation over time. Regular maintenance, such as roof repairs, HVAC servicing, and exterior painting, shouldn’t be ignored.
</ul>
 

<h2>Consolidate Debt</h2>

High-interest debt can hinder wealth-building in several ways. Such debt can eat into your income and consume a significant portion of your monthly budget. Think of it like this: the more money you spend on interest payments, the less you have available to spend otherwise. The strain on your monthly cash flow makes it difficult to cover essential expenses, save for emergencies, or invest in wealth-building opportunities. 

Using home equity to consolidate debt can free up money and improve your financial health. 

<ul>
<li>Lower Interest Rates: Credit cards, personal loans, and other forms of unsecured debt often have the highest interest rates. By consolidating high-interest debt into a single, lower-interest loan, you can reduce the overall cost of borrowing and save money on interest payments over time.
<li>Single Monthly Payment: Consolidating multiple debts into a single loan simplifies your monthly finances and makes it easier to manage your debt. Rather than juggling multiple payments with different due dates and interest rates, you'll have simply one convenient payment to make each month, streamlining your budgeting process and reducing the risk of missed payments.
<li>Extended Repayment Terms: Home equity financing solutions frequently have longer repayment terms than unsecured loans or credit card debt. By extending the repayment period, you can lower your monthly payments and improve your cash flow, making it easier to manage your debt and meet your financial obligations.

</ul>
 

<h2>Pay Off College Tuition</h2>

Pursuing higher education isn’t cheap. But education and the development of new skills can lead to future income growth in several ways. Home equity financing can cover tuition expenses for formal education programs, such as college, university, vocational school, or trade school. They can also be used to fund advanced degrees, such as master's degrees or doctoral programs, that lead to specialized knowledge and expertise in a particular field. Generally, earning an advanced degree can enhance your professional qualifications, increase your earning potential, and position you for leadership roles or higher-paying positions in your chosen industry. 

However, while investing in education can lead to future income growth and career advancement, it's essential to weigh the potential return on investment and ensure that the benefits outweigh the costs of borrowing. Most importantly, be sure to explore alternative financing options, such as scholarships, grants, employer tuition assistance programs, or personal savings, before turning to home equity financing for this use case.

<h2>Advance Your Career</h2>

If you have a business idea or entrepreneurial venture you want to pursue, tapping into your home equity can provide the initial capital needed to start your business. These funds can be used to cover startup costs, such as purchasing equipment, leasing office space, hiring employees, or funding marketing efforts. In addition, if you already own a business and are looking to expand operations, your home equity can provide the necessary funds to grow your business. Whether you're opening a new location or launching a new product line, home equity financing can support your business expansion goals.

<h2>Buy More Real Estate</h2>

You could also use your home equity to fund the downpayment on an additional property, one intentionally purchased as an investment opportunity. Investment properties can:

 
<ul>
<li>provide a steady stream of passive income from the rental payments from tenants
<li>diversify your income streams and balance out the volatility of other investments, such as stocks or bonds
<li>furnish financial stability by supplementing retirement savings and otherwise compounding your wealth over the long term via additional investments
</ul>
 

<h2>Diversify Your Investment Portfolio</h2>

We’ve all heard the old adage not to “put all your eggs in one basket.” That advice holds true for investments–it’s best to spread them out between different asset classes to decrease the risk. If you tap into your home equity, a financial advisor could help you select mutual funds, bonds, and other potential investment opportunities with which to diversify your portfolio. 

<h2>Build Your Emergency Fund</h2>

Your savings are there for the future–whether in case of an emergency, or to set you up in your retirement. Retirement savings not only allow you to maintain your standard of living after you stop working, but they can also cover healthcare costs, which we are more likely to accrue later in life. Plus, if you need to perform any renovations in order to <a href=”https://www.unison.com/blog/downsizing-vs-aging-in-place/”>age in place</a>, or put down a downpayment in efforts to downsize, these savings can be indispensable. Lastly, retirement should be your great next act in the grand play of life–having financial resources allows you to enjoy retirement to the fullest and pursue activities that bring fulfillment and joy.

<h2>How Unison Can Help You Build Wealth</h2>

One of the most popular ways to tap into your home equity to accomplish any of the above objectives has long been to utilize a home equity financing debt product, such as a home equity line of credit. These traditional options did enable homeowners to harvest their equity, but they were accompanied by punishingly high interest rates, and steep monthly payments that often left the borrower with no financial flexibility. Enter Unison. 

Unison pioneered the <a href=”https://www.unison.com/home-loan/”>Equity Sharing Home Loan</a>, a 10-year, shared appreciation, interest-only home loan with below-market rates for second mortgages*. Homeowners are empowered to access their equity with low monthly payments, thanks to both the loan’s partially deferred interest, as well as Unison’s share in their home’s future appreciation. 
 

If you’re interested in making your home equity work for you, but also want to maintain flexibility in your monthly spending, <a href=”https://www.unison.com/home-loan/”>learn more</a> about the Equity Sharing Home Loan today. 

*Based on an internal analysis and review through July 2024 of interest rates for second-lien home equity loans. 

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.

Couple looking at finances to figure out how to build wealth

How to Use Home Equity to Build Wealth

Tapping into your home equity is one of the best ways to build wealth passively. Learn how to use home equity to make money with little additional effort.

How to Use Home Equity to Build Wealth | Unison 

picture of couple looking at documents and thinking of ways to consolidate debt

Ways to Consolidate Debt

If you have multiple high-interest debts, you might be looking for a way to combine them into a single monthly payment. Learn about nine ways you can consolidate debt in this blog post, including a HELOC or Equity Sharing Home Loan.

9 Ways to Consolidate Debt | Unison

by Lauren Rosales-Shepard, Content Writer 

At <a href=”https://unison.com/”>Unison</a>, we’re fond of saying that we “pioneered” the equity sharing agreement, an innovative product that took note of conundrums faced by both homeowners and investors. Since then, we have paid close attention to the evolving needs and desires of homeowners, as well as the shifting state of the market. 

When it comes to traditional options, like the closed end home equity loan or a <a href=”https://www.unison.com/blog/about-helocs”>home equity line of credit</a> (HELOC), homeowners have been weary of increasingly high interest rates. And those who were lucky enough lock down favorable first mortgage rates on their homes have naturally been averse to <a href=”https://www.unison.com/blog/cash-out-refinance-pros-and-cons/”>refinancing</a>, or moving into a new house, when the current rates are so much higher. No one actively wants to increase their monthly payments! Unison began to look at ways to help reduce monthly obligations and shorten the loan term. The result? Let us introduce you to the Unison Equity Sharing Home Loan! 

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

You’ve heard of the <a href=”https://unison.com/blog/equity-sharing-agreements”>equity sharing agreement</a>, and your’re familiar with <a href=”https://www.unison.com/blog/pros-cons-home-equity-loan/”>home equity loans</a>. The Equity Sharing Home Loan unites aspects of both products to suit the needs of consumers in this market. 

Our Equity Sharing Home Loan is an interest-only, ten-year second mortgage that offers homeowners the opportunity to tap into their equity with low monthly payments. The interest rates are below-market for second mortgages, and the interest only payments are partially-deferred, leading to more flexibility for homeowners when it comes to managing their monthly finances. The shared appreciation component enables us to offer these lower rates. At the end of the loan, the homeowner pays back the principal, any deferred compounded interest, as well as a percentage of the home’s appreciation. 

Let’s unpack each of these factors. To begin with, an individual’s interest rate is largely determined by their creditworthiness. Unison’s share in the home's future appreciation is fixed at the beginning of the origination process, and the amount is proportional to the amount of the Equity Sharing Home Loan. Unison's share is typically 1.5x the percentage borrowed. For example, if you borrow 10% of your home’s current value, Unison will receive 15% of the future appreciation. An important distinction is that unlike Unison’s Equity Sharing Agreement, Unison does not share in any depreciation in the home’s value. 

<h2>What are the benefits of a Unison Equity Sharing Home Loan?</h2>

<ul>
<li>Below-Market Interest Rates for Second Mortgages*:
 You only pay up to 75 percent of your loan’s monthly payments every month and defer the remaining 25 percent of the interest payments to the end of the loan.
<li>Low Monthly Payments: The partially-deferred interest, plus the equity sharing component, keeps monthly payments low.
<li>Reach Your Financial Goals: When you save money on your monthly obligations, these savings can go elsewhere to further your financial goals.
<li>Flexible Terms: There is no prepayment penalty if you decide to pay off sooner.
<li>Hold on to Your Equity: We share in a portion of the future appreciation of your home, not the equity you’ve already built.
</ul>
*Based on an internal analysis and review through July 2024 of interest rates for second-lien home equity loans.
 

<h2>How does the Unison Equity Sharing Home Loan compare to other home equity financing options?</h2>

<h3>Home Equity Loan vs Equity Sharing Home Loan</h3>
 
Perhaps the first obvious comparison to make is between the traditional home equity loan and Unison’s Equity Sharing Home Loan. A “closed-end” home equity loan offers the homeowner the loan as an upfront lump sum, and the homeowner pays back a portion of the principal, plus interest at a fixed rate, each month for a set term–often 15 years. 

Unison’s Equity Sharing Home Loan also starts with an upfront lump sum. However, the monthly payment is interest only, with a portion that is deferred. Then, at the end of the loan term (10 years–or, prepay before without penalty!), the homeowner will pay back the principal, any compounded deferred interest, and a percentage of the home’s appreciation in value. 

Because monthly payments to Unison are interest-only–and that interest is partially-deferred, too!-- they are extremely low. This is especially the case when compared to other traditional forms of home equity financing, which require full interest, and a percentage of the principal amount every month (though this is not the case with HELOCs, as you will read below). 

<h3>Home Equity Line of Credit (HELOC) vs Equity Sharing Home Loan</h3>
 

A <a href=”https://www.unison.com/blog/how-does-a-heloc-work/”>HELOC</a> is a line of credit that has a draw period and a repayment period. During the draw period, the homeowner is able to withdraw up to a specific amount of Funds. They often only need to pay interest on the amount that they have used each month, rather than interest on the entire amount available. (That said, even if you don’t withdraw any cash, there is often a small maintenance fee imposed). Then, during the repayment period–you guessed it, the homeowner repays the amount, with interest. It’s also important to note that HELOCs tend to have variable interest rates, which means that the interest can change based on market conditions. 

In contrast, Unison’s Equity Sharing Home Loan has fixed interest rates, and the homeowner only pays a partial percentage of that interest on the loan each month–the rest is compounded, and deferred to the end of the loan. With a Unison Equity Sharing Home Loan, the homeowner will never experience uncertainty regarding their interest rate during the loan term. Plus, the partially-deferred nature of the interest keeps monthly payments low. 

<h3>Reverse Mortgage vs Equity Sharing Home Loan</h3>
 
A <a href=”https://www.unison.com/blog/reverse-mortgage-payments-costs/”>reverse mortgage</a>, as the name implies, differs from a regular mortgage in that the lender makes payments to the homeowner rather than the other way around–either in a lump sum, monthly installments, or as a line of credit. The loan becomes due when the homeowner permanently moves out of the home, sells the home, or passes away. At that time, the loan amount plus accrued interest and fees must be repaid, which is usually done through the sale of the home, with any remaining equity belonging to the homeowner or their heirs. One of their defining features is that reverse mortgages are only available to homeowners age 62 or older. 

Unison’s Equity Sharing Home Loan does not have an age restriction. And while the reverse mortgage defers the entirety of accrued interest to the end of the loan, the Equity Sharing Home Loan does have monthly interest-only payments, with a percentage deferred to the end of the term. Additionally, while a reverse mortgage requires that the homeowner either own their home outright, or use part of the funds to pay off the remainder of the first mortgage, an Equity Sharing Home Loan is a second mortgage, which is not the primary lien on the property. 

<h3>Cash-Out Refinance vs Equity Sharing Home Loan</h3>
 
A cash-out refinance is the process of a type of mortgage refinancing where you borrow more than your current mortgage balance and receive the difference in cash. While the primary objective is, as the name implies, to get “cash out,” homeowners often also try to take advantage of more favorable interest rates at the same time, ensuring that they will have lower monthly payments even as they extend the amount of time they will be repaying the mortgage. Like with the original first mortgage, homeowners make monthly payments made up of interest and a percentage of the principal. 

The Equity Sharing Home Loan is a second mortgage, and not a replacement mortgage for the underlying first mortgage. As such, it has a much shorter term–ten years. Plus, the monthly payment does not include a portion of the principal loan amount, as it, along with any compounded, deferred interest, and a percentage of the home’s appreciation, is repaid at the term’s end. 

Unison developed the Equity Sharing Home Loan as an innovative option for homeowners who want to access the equity in their homes without moving and without exceedingly high monthly payments. Does this describe you? You can <a href=”https://www.unison.com/home-loan/”>learn more</a> today!

family standing outside of home looking at something

Introducing the Unison Equity Sharing Home Loan

Want to tap into your equity? Learn more about Unison's Equity Sharing Home Loan, and see how it compares to traditional forms of lending like HELOCs and reverse mortgages.

Introducing the Unison Equity Sharing Home Loan | Unison Equity Sharing

Homeowners preparing for retirement could be sitting on a sizable, untapped financial asset—your <a href=”https://www.unison.com/blog/what-is-home-equity-and-how-to-use-it/”>home equity</a>. If you've been paying off your mortgage for a while, chances are you could be using that home equity for your retirement income. Before tapping into home equity, though, it's crucial to understand if pulling equity from your home when you're retired is the right option for you and, if so, the best ways to use it. 

<ul>
<li><a href=”#WaystoUse”>Ways to Use Home Equity in Retirement</a>
<li><a href=”#ShouldYouUse”>Should You Use Home Equity in Retirement?</a>
<li><a href=”#Unison”>Using Unison’s Equity Sharing Agreement or Equity Sharing Home Loan as Extra Income for Seniors</a>
</ul>
 

<a id=”#WaystoUse”><h2>Ways to use Home Equity in Retirement</h2></a>

While home equity does not count as retirement savings, you can leverage it as extra cash flow if you need additional income. Learn about the different options for tapping into home equity while retired below. 

<h3>Cash-Out Refinance</h3> 

A <a href=”https://www.unison.com/blog/cash-out-refinance-pros-and-cons/”>cash-out refinance</a>—like typical mortgage refinancing—involves a new interest rate and mortgage term. However, with a cash-out refinance, your new loan is larger than your mortgage balance, so you get to pocket the difference. You can secure a cash-out refinance by applying for a new mortgage with a higher loan amount, then paying off the rest of your current mortgage with the new one. The amount that remains can be put toward your retirement goals. 

Cash-out refinancing is a great option if you've been paying off your mortgage for years and can afford a higher monthly payment and if current interest rates are lower than the ones you're currently paying. If interest rates are higher or if you don't want to add more debt, temporarily lose home equity, or worry that you can't afford a larger monthly payment, you're probably better off skipping a cash-out refinance. 

<h3>Downsizing</h3> 

If you're an empty-nester with more space at home than you can or want to take care of, you might consider <a href=”https://www.unison.com/blog/downsizing-vs-aging-in-place/”>downsizing rather than aging-in-place</a>. This involves selling your current home and moving to a smaller home, apartment, or senior living community. You can put the profits from your home sale toward your more immediate financial needs in retirement. 

While downsizing often lightens your monthly payments, it's possible that you could run into inflation, which would lessen the amount of money you gain from your home sale. In addition, housing shortages and higher costs of living could make it difficult to find a new living community you can afford. If you're considering downsizing, talk to a financial planner before moving forward with a sale to evaluate the state of the housing market and determine if this option would financially benefit you. 

<h3>Equity Sharing Agreement</h3> 

Home equity sharing agreements are another way to use home equity during retirement without taking on an additional loan. In this process, you'll make an agreement with a third party, such as an investor, and they'll give you cash based on the current value of your home. In exchange, you'll share a portion of your home's future change in value with them. At the end of a given term or when you decide to sell your home, you'll pay the agreed upon amount. 

This is perfect for retirees who don't want to worry about adding another monthly payment to their budget. However, an equity sharing agreement might cost more than a loan, especially if your home appreciates significantly over the term. Learn how <a href=”#UnisonESA”>Unison's equity sharing agreement works for retirees</a>. 

<h3>Home Equity Line of Credit (HELOC)</h3> 

A <a href=”https://www.unison.com/blog/about-helocs/”>home equity line of credit</a> is a flexible, revolving line of credit that <a href=”https://www.unison.com/blog/how-does-a-heloc-work/”>uses your home as collateral</a>. One <a href=”https://www.unison.com/blog/pros-cons-heloc/”>advantage of a HELOC</a> is that you'll have more control over how much money you take out at a single time, since your money is available on an as-needed basis—and these funds can be used for anything you may need during retirement. The <a href=”https://www.unison.com/blog/home-equity-loan-heloc-application-approval-process/”>process of securing a HELOC</a> starts with applying through a lender, who will ultimately decide on a credit limit based on the equity you've built in your home. 

It's possible that interest rates could increase over the life of the HELOC because the rates are variable. and if your home value decreases, there's a potential for negative home equity. For retirees that don't have a steady stream of income, adjusting monthly payments could be too difficult. Because your home functions as collateral, failing to meet payment requirements could put your home at risk of foreclosure. 

<h3>Home Equity Loan</h3> 

Home equity loans offer a lump sum of cash to be paid back over time (with interest). Home equity loans, also called <a href=”https://unison.com/blog/what-is-second-mortgage”>closed end second mortgages</a>, are taken out in addition to your first mortgage using your home as collateral. In order to secure a home equity loan, you'll start by getting your home equity appraised by a lender. 

Home equity loans for seniors are a great way to access the home equity you've built up over the years. A major <a href=”https://www.unison.com/blog/pros-cons-home-equity-loan/”>plus of home equity loans</a> is their fixed interest rate that's usually lower than other loan types. If you need to pay for a large one-time payment without drastically altering your monthly budget, this could be the right choice for you. However, the process involves taking on an additional monthly payment and more debt, which could be a financial burden in the long run. You'll also risk foreclosure on your home if you can't make payments on time. 

<h3>Reverse Mortgage</h3> 

Retirees that want an option for using home equity that's tailored specifically to their age group may want to consider a <a href=”https://www.unison.com/blog/reverse-mortgage-payments-costs/”>reverse mortgage</a>. This senior equity loan is only open to homeowners ages 62 and older who own significant home equity. With a reverse mortgage, a lender converts your home equity into cash and pays it out to you in monthly installments, as opposed to you paying the lender (as with a traditional mortgage). After your home is appraised, you'll receive a disbursed amount of money based on your home equity, which is then repaid when you sell your home or pass away. 

Not only does a reverse mortgage give you additional cash flow, but it allows you to continue living in and maintaining ownership of your current property. It's important to remember, though, that your home equity may decrease as you accrue interest, and you could still lose your home to foreclosure should you default on your reverse mortgage. 

<a id=”#ShouldYouUse”><h2>Should You Use Home Equity in Retirement?</h2></a>

Whether you should or should not use home equity in retirement is heavily dependent on your financial situation and available budget. It's best to consult a financial advisor and assess your current situation before deciding to tap into your home equity, but here are a few guidelines to get you started.
 

<h3>When Tapping into Home Equity Is a Good Idea</h3> 

<ul>
<li>You're <a href=”https://www.unison.com/blog/home_improvement_renovation_home_equity/”>funding home improvements</a>
<li>You're fielding unexpected emergency expenses
<li>You're <a href=”https://www.unison.com/blog/tips/debt_management/”>paying off high-interest debt</a>
<li>You're covering college tuition costs for children or grandchildren
</ul>
 

<h3>When Tapping into Home Equity Is a Bad Idea</h3> 

<ul>
<li>You have a limited budget or significant debt
<li>You don't have a specific purpose in mind for the money
<li>You're planning to sell your home in the near future
<li>You wish to leave your home to family in your will
</ul> 

<a id=”#UnisonESA”><h2>Using Unison’s Equity Sharing Agreement or Equity Sharing Home Loan as Extra Income for Seniors</h2></a>

Unison's <a href=”https://www.unison.com/blog/equity-sharing-agreements/”>equity sharing agreement</a> helps retirees tap into their home's equity <a href=”https://www.unison.com/blog/how-to-access-home-equity-without-debt/”>without the burden of added debt</a>, interest, or monthly payments. 

We provide seniors with a straightforward, stress-free process. You'll receive up to 15% of your home’s current value in cash, in exchange for a percentage of your home’s change in value over time. You can use that cash for any financial assistance you need during retirement. During the <a href=”https://www.unison.com/blog/process-agreement-duration/”>30-year term</a>, you can choose to <a href=”https://www.unison.com/blog/process-termination/”>buy Unison out</a> or settle the agreement upon the sale of your home. Should your home value increase, Unison will share in the profits. If your home value should decrease, we'll typically share in the loss. 

<h3>Unison’s Equity Sharing Home Loan–an Innovative New Offering</h3> 

The Equity Sharing Home Loan combines features of a traditional home equity loan with aspects of Unison’s pioneering equity sharing agreement. It is a mortgage with a ten-year term that allows borrowers to access the equity in their home at a low, below-market interest rate for second mortgages, which is moderately offset by a percentage of future appreciation of the house's value. This loan also features interest-only payments, with partially-deferred interest, leading to a lower monthly obligation for the homeowner.

 
Either a) after ten years, b) when you sell your home, or c) if you choose to prepay, the net appreciation (if any) will be determined. The loan is negative amortizing, so you will owe the principal amount borrowed, the agreed-upon percentage of the home’s appreciation, as well as any deferred interest. Note that unlike Unison’s equity sharing agreement, Unison does not share in any depreciation in your home’s value. 

If you’d like to learn more about Unison’s offerings, and see whether tapping into your equity with either the equity sharing agreement or the equity sharing home loan might be a good fit for you, <a href=”https://unison.com”>learn more</a> today. 
 
*Based on an internal analysis and review through July 2024 of interest rates for second-lien home equity loans.
 

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.

Couple sharing ideas about how to use home equity in retirement.

Couple sharing ideas

There are a few ways to access your home equity–this article describes home equity loans, HELOCs, among others, including Unison's Equity Sharing Home Loan.

How to Use Home Equity in Retirement | Unison

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 having to move. 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>
<li><a href=”EquitySharingHomeLoan”>Unison’s Equity Sharing Home Loan</a>

</ul> 

<a id=”#CashOutReFi”><h2>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 id=”#HELOC”><h2>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 traditional home equity loans.</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 id=”#HomeEquityLoan”><h2>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>, for example, 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. 
</ul> 

<a id=”#HomeSaleLeaseBack”><h2>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>Total Loss of Equity: To reiterate, selling your home in this manner means that you lose all of your equity.
<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 id=”#ReverseMort”><h2>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 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 Sharing Agreements Work?</h3> 

The process and terms will vary by provider, but generally a home equity sharing 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 Sharing 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>, we 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 to own 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 id=”#EquitySharingHomeLoan”><h2>Unison’s Equity Sharing Home Loan</h2></a>

Unison’s equity sharing home loan is an innovative product that combines some of the best features of the home equity sharing agreement with the familiar idea of a home equity loan, or second mortgage. 
 
<h3>How Does Unison’s Equity Sharing Home Loan Work?</h3> 

The equity sharing home loan is a 10-year, shared appreciation, interest-only home loan with below-market rates for second mortgages*. You get to enjoy lower monthly payments thanks to both the loan’s partially deferred interest, as well as Unison’s share in your home’s future appreciation. 

<h3>Pros of Unison Equity Sharing Home Loan</h3> 

<li>Low Monthly Payments: The shared appreciation component, as well as the partially deferred interest, keep your monthly obligation low and increase your cash flow and spending power.
<li>No Prepayment Penalty: You can repay your loan early without penalty, which includes paying back the original amount, any deferred interest, and the share of any appreciation.
<li>Capital Improvement Adjustment: Unison believes that if you make improvements to your home that boost its value (beyond regular maintenance), you should get all the benefits! The homeowner may apply to keep any value added by renovations, after three years. 
</li>
 
<h3>Cons of Unison Equity Sharing Home Loan</h3> 

<li>Eligibility : Homeowners must have a minimum FICO score of 680, a maximum combined loan to value ratio of 70%, and a debt-to-income ratio not exceeding 40%.
<li>Potential Share Appreciation Interest: If there is excessive home price appreciation, this can add to the total cost. However, Unison’s equity sharing home loan also includes a 17% annualized return cap which may limit the impact of the shared appreciation term. 

 <a href=”https://www.unison.com/home-loan/”>Learn more</a> about Unison’s Equity Sharing Home Loan today, and see whether it might be a good fit for you.

 
 
*Based on an internal analysis and review through July 2024 of interest rates for second-lien home equity loans.
 
 
 
 
 
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.

Happy couple sitting on porch of home they have equity in.

Alternative Ways to Get Equity Out of Your Home

You don't have to sell your home to harvest your equity. Learn more about the alternative ways to tap into your equity, from HELOCs to Unison's Equity Sharing Home Loan, among others.

Alternative Ways to Get Equity Out of Your Home | Unison

Couple looking at documents trying to figure out home equity alternatives to a cash-out refinance

Home Equity Alternatives to a Cash-Out Refinance

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

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.

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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.

Home Equity Loan vs. HELOC

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

Alternatives to a Reverse Mortgage

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

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.

Comparing Reverse Mortgages to Cash-Out Refinancing

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 

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.

Advantages & Disadvantages to a Home Equity Loan

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

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.

Advantages & Disadvantages to a Home Equity Line of Credit (HELOC)

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 

It's no secret that life is full of unexpected expenses, large purchases, and other pressing financial demands. For help meeting these needs, homeowners can make their home equity work for them, with financial solutions like reverse mortgages and home equity loans. But which home equity sharing option is better for you? Compare reverse mortgages vs home equity loans so you can make the best decision for your financial circumstances. 

<ul>
 <li><a href="#WhatReverseMortgage">What Is a Reverse Mortgage?</a>
 <li><a href="#WhatHomeEquityLoan">What Is a Home Equity Loan?</a>
 <li><a href="#DiffRevvsHomeEq">Key Differences Between Reverse Mortgage vs Home Equity Loan</a>
 <li><a href="#WhichRight4U">Which Home Financing Option Is Right for You?</a>
 <li><a href="#AltOptionUnison">An Alternative to Reverse Mortgages & Home Equity Loans</a>
</ul>
 

<a id="WhatReverseMortgage"><h2>What is a Reverse Mortgage?</h2></a>
<a href="https://www.unison.com/blog/reverse-mortgage-payments-costs/">Reverse mortgage loans</a> are tax-free home loans for homeowners over the age of 62 that convert a portion of home equity into accessible cash. Unlike a traditional mortgage where borrowers make regular payments to the lender, a reverse mortgage requires lenders to make payments to the borrower. 

In order to qualify for a reverse mortgage, you must own your home or have a substantial amount of equity in it. Your home must be your primary residence (not an investment property or vacation home), and you should be in a position to continue paying home maintenance costs. 

While these are general reverse mortgage requirements, terms and conditions may differ if you have a proprietary reverse mortgage offered by private lenders or a <a href="https://www.benefits.gov/benefit/709">home equity conversion mortgage</a> (HECM).

<h2>Pros of Reverse Mortgages</h2>

There are several <a href="https://www.unison.com/blog/reverse-mortgage-pros-and-cons/">pros and cons to reverse mortgages</a>, including:

<ul>
 <li>Financial Security: The payment(s) you receive from your lender can provide additional security or a supplement to your fixed income.
Multiple Payment Options: You can receive your reverse mortgage payments through monthly payments, a line of credit, a lump sum, or a combination of these options.
 <li>Not Taxable: The funds you receive from your reverse mortgage are not considered income, and therefore you will not have to pay taxes on them. 
 <li>Ability to Remain in Your Home: You can access the equity you've built while continuing to live in your home and maintaining ownership.
 <li>Protection Against Housing Market Fluctuations: Because a reverse mortgage is considered a non-recourse loan, you will not be liable for any more than the home's appraised value when the loan is due.
</ul>
 

<h2>Cons of Reverse Mortgages</h2>

<ul>
 <li>Additional Costs: Obtaining a reverse mortgage has a price tag. Reverse mortgage costs include origination fees, closing costs, attorney services, monthly servicing fees, and more.
 <li>Interest Accumulation: Reverse mortgage interest rates increase your loan balance over time, meaning the equity in your home may decrease in value as the loan grows and negatively impact your heirs. 
 <li>Impact on Government Benefits: You may no longer be eligible for government benefits, such as supplemental security income (SSI) and Medicaid, if you receive a reverse mortgage.
 <li>Risk of Foreclosure: Should you fall behind on paying property taxes, maintenance fees, or other costs associated with your home, you could be at risk of losing your home.
 <li>Complexity: Reverse mortgages can be complicated, long-term commitments that involve a variety of terms and conditions. While borrowers are required to undergo counseling to enhance their understanding, there may still be challenges when navigating the loan. 
</ul>
 

<a id="WhatHomeEquityLoan"><h2>What is a Home Equity Loan?</h2></a>

Home equity loans, often referred to as a second mortgage, are a financial tool that allows homeowners to borrow money using the equity that they have built in their home. As part of the home equity loan process, payments are made in a lump sum, allowing you to more immediately take care of important expenses. 
 

Home equity repayment period terms may vary by lender, but borrowers are generally required to make monthly payments within a specified loan term ranging between five to 30 years. Also, second mortgage rates are often higher than the rates on your primary mortgage. 

Generally, to meet home equity loan requirements, you must have at least <a href="https://www.bankrate.com/home-equity/requirements-to-borrow-from-home-equity/">15% to 20% equity</a> in your home, a strong credit score, and a stable income. 

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

<ul>
 <li>Lump Sum Payment: Ideal for large expenses like home renovations or education costs, home equity loans allow you to receive a one-time lump sum to put towards your financial goals.
 <li>No Age Requirement: Most lenders do not have a minimum age requirement for home equity loan eligibility (beyond being a legal adult).
 <li>Fixed Rates: Throughout the life of the loan, you can expect a fixed interest rate and consistent monthly payments—regardless of fluctuations in the market. 
 <li>Lower Interest Rates: In comparison to other types of loans, home equity loan interest rates are typically lower and may even be tax-deductible. 
 <li>Flexible Repayment Period: With the option to extend your repayment period for up to 30 years, your monthly payments are more budget-friendly.
</ul>

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

<ul>
 <li>Closing Costs: Home equity loans typically involve steep upfront costs, including appraisal fees, origination fees, and more.
 <li>Limited Funds: Depending on the amount of equity you have in your home and other appraisal factors, the amount of funds that you have access to may be limited. 
 <li>Reduced/Negative Equity: You give up a portion of your home equity when you take out a home equity loan. And if there is a measurable drop in the real estate market, the value of your home may diminish and possibly leave you with a loan balance exceeding the value of your property.
 <li>Risk of Foreclosure: Because your home is collateral for the loan, if you fail to keep up with payments, you could lose your home in a foreclosure.
 <li>Impact on Financial Goals: If you use the proceeds from a home equity loan to pay for a major expense, such as home repairs or medical bills, this could impact your ability to save for future financial goals, such as retirement.
</ul>

 

<a id="DiffRevvsHomeEq"><h2>Key Differences Between Reverse Mortgages vs Home Equity Loans</h2></a>

 Reverse mortgages are geared toward older homeowners hoping to tap into home equity without making monthly payments, whereas home equity loans are lump sum payments for homeowners of any age and require regular repayments.
 
 When weighing the options of a reverse mortgage vs a home equity loan, it's important to factor in which option will best fit your situation. Consider the main differences between reverse mortgages and home equity loans—requirements, disbursement, and repayment terms—below. 

 <H3>Requirements</h3> 

<ul>
 <li>Reverse Mortgage: You must be 62 years of age or older, own your home or have a significant amount of equity in it, and be able to make property-related payments on time and in full.
 <li>Home Equity Loan: You must be a legal adult, have at least 15% to 20% equity in your home, and show proof of steady income and a good credit score.
 </ul> 

 <h3>Disbursement</h3> 
<ul>
 <li>Reverse Mortgage: You will receive monthly payments, a lump sum, or a line of credit (or a combination of the options).
 <li>Home Equity Loan: You will be given a single lump-sum payment.</ul> 

 <h3>Repayment</h3> 
<ul>
 <li>Reverse Mortgage: You will not have a fixed repayment schedule or be required to make monthly payments during the life of the loan. When the loan becomes due, you or your heirs can pay off the balance in full (typically by selling the home) or refinance your loan.
 <li>Home Equity Loan: You will make monthly payments over a set timeline (ranging from five to 30 years) with a fixed interest rate. 
 </ul>

 <a id="WhichRight4U"><h2>Which Home Financing Option Is Right for You?</h2></a>

Comparing home loan options and choosing the best option for your situation can be a difficult task. The best way to determine whether or not a reverse mortgage or a home equity loan is best for you is to examine the requirements and the advantages and disadvantages of each option. 

First, think about your priorities. For example, if finding cheaper mortgage rates is important to you, a home equity loan may not be your ideal option because interest rates increase over time. Or, if you're looking for fast home loan approval, think twice about a reverse mortgage because the application process typically takes longer. 

 <h3>When Reverse Mortgages Might Be Better</h3>
 
A reverse mortgage may be the best option for you if you are planning to stay in your home for five or more years, have significant equity in your home, are at least 62 years of age, and can afford to pay home maintenance costs, insurance, and property taxes. 

 <h3>When Home Equity Loans Might Be Better</h3> 

A home equity loan, or a second mortgage, is ideal for homeowners who are looking for a more immediate financial solution with lower interest rates to cover home renovations or other costly expenses. 

 <a id="AltOptionUnison"><h2>An Alternative to Reverse Mortgages & Home Equity Loans</h2></a>

 <a href="https://unison.com">Unison</a> offers <a href="https://www.unison.com/blog/reverse-mortgage-alternatives/">alternatives to reverse mortgages</a> and home equity loans that help homeowners <a href="https://www.unison.com/blog/how-to-access-home-equity-without-debt/">access home equity without adding debt</a>, interest, or monthly payments. 

With an <a href="https://www.unison.com/blog/equity-sharing-agreements/">equity sharing agreement</a>, Unison can convert up to 15% of your home's value to cash, and unlike a typical reverse mortgage loan or home equity loan, there is no added financial stress. Our shared equity agreement allows you to trade a portion of your home equity for cash to support your retirement, pay off debts, and help with other expenses. 

 
As part of the home equity agreement, you maintain complete ownership of your home. Should your home increase in value, Unison will share in the profits, but if your home decreases in value, we'll typically share in the loss. During the 30-year term, you can either <a href="https://www.unison.com/blog/process-termination/">buy Unison out</a> or settle the home equity sharing agreement when you sell your home. 

Find out 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.

Differences Between Home Equity Loans & Reverse Mortgages

Looking for ways to tap into your home equity? Explore the differences between reverse mortgages and home equity loans to determine which is right for you.

Reverse Mortgage vs. Home Equity Loan | Unison

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.

Unison Holidays Wish List 2023 Sweepstakes Official Rules

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.

Cash-out refinance pros & cons

 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

You’ve probably heard, vaguely, that it’s good to build equity in your home. You’re aware, also vaguely, that equity is a good thing to have. But what is home equity, exactly? How can you calculate the equity you have in your home? What can you even use that home equity to do? 

If you’ve ever asked these questions before, you’re reading the right blog post. The home tends to be one’s largest asset; it is, thusly, important to understand both how this is the case and how to leverage it! 



<h2>What is Home Equity?</h2>
“Home equity” refers to the portion of your home's value that you own outright. 

When you purchased your home, you put forth a downpayment and took out a mortgage. Each month, you make a payment against that mortgage, so that over time you have chipped away at it. The so-called “equity” represents the difference between the current market value of your home and the outstanding balance of your mortgage. Any other debts that are secured by your home also detract from your equity. 

<h2>How to Calculate Equity in a Home</h2>
Think of it like an equation: 
Home Equity = Current Market Value of Home - Mortgage Balance(s) - Other Liens 

Let’s describe each component: 

Current Market Value of Home: This is the estimated value of your home in the current real estate market. It can change over time due to factors like local real estate trends, any renovations you undertake, or basic economic conditions. Appraisals or comparative market analyses can help determine your home's current value (and most lenders will order them). 

Mortgage Balance(s): This represents the amount you still owe on your mortgage loan(s). It includes both the principal balance (the original loan amount) and any accrued interest. As we stated above, when you make mortgage payments over time, the principal balance decreases, which increases your home equity. 

Other Liens: In some cases, homeowners may have other liens or loans secured by their property, such as home equity lines of credit (HELOCs), or second mortgages. These outstanding balances are subtracted from your home's value to calculate your net home equity. 

<h2>How to Build Home Equity</h2>
As we can deduce from the above equation, building home equity simply entails increasing the value of your home and reducing the amount you owe on your mortgage. Over time, as both you make mortgage payments and your home's value appreciates, your home equity grows. 

There are some strategies you can employ to build your home equity:
<ul>
 <li>Make Regular Mortgage Payments: You should be doing this anyway, but consistently make your monthly mortgage payments. A portion of each payment goes toward reducing the principal balance, which increases your equity.
<li>Choose a Shorter Loan Term:Consider a shorter loan term, such as a 15-year mortgage, instead of a 30-year mortgage. While monthly payments may be higher, you'll build equity faster and pay less in interest over the life of the loan.
<li><h3>Make Extra Payments:</h3> Make additional payments toward the principal balance of your mortgage. Even small extra payments will add up over time and thus accelerate your equity growth.
<li>Refinance to a Lower Interest Rate: Have interest rates dropped since you obtained your mortgage? Consider refinancing to a lower rate! This can lower your monthly payments and enable you to allocate more funds toward reducing the principal balance.

<li><h3>Make Home Improvements:</h3> Invest in home improvements and renovations that increase your property's value. Some examples might be kitchen and bathroom upgrades, energy-efficient improvements, or landscaping enhancements.
<li>Maintain Your Home: As a responsible homeowner, you should already regularly maintain and repair your home to prevent depreciation. However, in addition, addressing issues promptly can help maintain or increase your property's value.
<li>Avoid High-Interest Debt:Minimize high-interest debt–like credit card balances–by paying them off as quickly as possible. This will prevent excessive borrowing and ensure more of your monthly budget goes toward mortgage payments.

<li>Avoid Second Mortgages or HELOCs for Non-Essential Expenses:
While home equity lines of credit (HELOCs) and second mortgages can be useful, avoid using them for non-essential expenses or lifestyle upgrades. It is a much better strategy to use home equity for investments or major home improvements that add value.

<li><h3>Make a Larger Down Payment:</h3> When purchasing a home, consider making a larger down payment. The larger the down payment, the more equity in the property from the beginning.

<li>Monitor Property Values: Monitor local real estate market trends and your property's value. Property appreciation can have a huge impact on your home equity.
<li>Avoid High-Risk Loans: Be cautious about high-risk loan products, such as interest-only mortgages or adjustable-rate mortgages (ARMs); they can make it harder to build equity.
</ul>
 
 
<h2>How To Use Your Home Equity</h2>

Your home equity can be a powerful financial tool, and there are multiple situations where it might be practical to wield it. 

 
<h3>Cancel Private Mortgage Insurance (PMI)</h3> 
As you may recall, <a href="https://unison.com/blog/what-is-pmi-on-mortgage">PMI</a> is typically required when the borrower's down payment is less than 20% of the home's purchase price (or appraised value). It's an additional cost that is meant to protect the lender in case the borrower defaults on the loan. The homeowner makes monthly PMI payments as well as the regular mortgage payments. 
One key aspect to canceling PMI is your loan-to-value ratio (LTV). This is because federal law requires automatic termination of PMI once the LTV ratio reaches 78%, but some lenders may allow cancellation at 80% or even sooner if certain conditions are met. To determine your LTV, divide your mortgage balance by the current market value of your home. For example, if you owe $150,000 on your mortgage, and your home is appraised at $200,000, your LTV ratio is 75% (150,000 / 200,000). 

<h3>Make Home Improvements</h3> 
Do you have an unfinished basement that has been driving you mad with its wasted potential? Perhaps you’ve been dying to open up your kitchen into the dining room to make the most of your main floor? Or, is your bathroom still stuck in 1960? If you tap into your home equity, the cash you receive can be used for <a href="https://unison.com/blog/home_improvement_renovation_home_equity">these renovations</a>–and other home improvements that you might want. Such projects not only make your house a better place for you and your family, but could potentially also increase the value of your home. 

<h3>Pay For College Tuition</h3> 
If you’re starting to build a strategy for financing your child’s college education, you’ve probably familiarized yourself with a multitude of options. College is expensive; even with scholarships and grants, most students and their families must seek additional forms of financial aid. Using home equity to pay for college can provide a source of funding with potentially lower interest rates compared to other borrowing options, such as personal loans or credit cards. 

<h3>Fund Your Big Business Idea</h3> 
Itching to turn entrepreneur? It’s possible to use your home equity to secure financing–as opposed to personal or business loans. Do your research and see which option has more favorable terms, like fixed or lower interest rates. Just remember, when you use your home equity, you are technically putting your home on the line! 

<h3>Consolidate High-Interest Debts</h3> 
Debt can be a weight chained to your ankles that makes it almost impossible to keep your head above water. Credit cards, personal loans, and medical bills are all forms of high-interest debt that can haunt you. If you find yourself dragged down by such debt, you might be able to experience some relief by leveraging your home equity to consolidate–or even eliminate!--it. 

<h3>Purchase a New Home</h3> 
This strategy allows you to leverage the equity you've built in your current home to finance the purchase of a new one. It’s always a good idea to consult a financial professional when making a big financial decision; however, in this situation in particular you should meet with a mortgage professional to go over the details of this strategy. 

<h3>Save for Retirement</h3> 
Living on a fixed income post-retirement can be really tough; the cost of living rises, but your savings stay the same. Diversifying your retirement savings across different assets and income streams can help ensure financial stability in retirement, and tapping into your equity can be a strategic component. This is especially true if you’re desirous of <a href="https://unison.com/blog/downsizing-vs-aging-in-place">aging-in-place</a> and feel that you will need to make some home improvements in order to enable you to stay in your home. 

<h2>How to Take Equity Out of Your Home</h2> 

<h3>Cash-Out Refinance</h3> 
A <a href="https://unison.com/blog/how-long-to-get-cash-out-refinance">cash-out refinance</a> is a mortgage refinancing option in which a homeowner replaces their existing mortgage with a new one–that has a higher loan amount, and often potentially better terms. Then the homeowner receives the difference between the two loan amounts in cash. So in other words, 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. Bear in mind, though, that undertaking a cash-out refinance will reset the clock on your mortgage repayment, and increase the mortgage balance. 
<h3>Home Equity Loan</h3> 
A <a href="https://unison.com/blog/cash-out-refinance-vs-home-equity-loan">home equity loan</a> is a loan that uses your home equity as collateral. Since you’re staking your home, the terms tend to be better than a pure personal home, as lenders feel that it is more secure. It is often referred to as a “second mortgage.” It’s important to note that a home equity loan adds an additional monthly payment to your financial obligations, and may come with a variable interest rate that would make it very difficult to make an accurate financial plan for the future. 

<h3>Home Equity Line of Credit (HELOC)</h3> 
A <a href="https://unison.com/blog/home-equity-loan-heloc-application-approval-process">HELOC</a> is a revolving line of credit–rather like a credit card–where borrowers can access funds as needed up to a predetermined credit limit. Once again, your home’s equity is the collateral for the loan. Traditionally, HELOCs have two phases: the draw period, during which you can access the funds and, often, make interest-only payments, and the repayment period, which is when you stop using the funds and must repay that which you’ve spent as well as the accumulated interest. <a href="https://unison.com/blog/about-helocs">HELOCs</a> offer flexibility and convenience for accessing funds when needed, but they are also frequently accompanied by variable interest rates that can lead to increasing monthly payments, and the potential for overspending or accumulating high-interest debt. 

<h3>Reverse Mortgage</h3> 
A <a href="https:/unison.com/blog/reverse-mortgage-payments-costs">reverse mortgage</a>, designed specifically for homeowners aged 62 or older, allows the homeowner to convert a portion of their home's equity into tax-free cash without having to sell their home, give up ownership, or make monthly mortgage payments. Instead of monthly payments, the loan is typically repaid when the homeowner moves out of the home, sells the home, or passes away. At that point, the loan balance, including accumulated interest and fees, is settled by selling the home, with any remaining equity belonging to the homeowner or their heirs.There are multiple disbursement options, such as: a lump sum payment, a credit line to be drawn from as-needed, regular monthly payments, or even a combination of these. Of course, <a href="https://unison.com/blog/reverse-mortgage-pros-and-cons">this option</a> is only available to those who are over 62 years of age. 

<h3>Home Equity Sharing Agreement</h3> 
In an <a href="https://unison.com/blog/equity-sharing-agreements">equity sharing agreement</a>, the homeowner trades a portion of their home's equity to an investor or partner in exchange for an upfront cash payment. This arrangement is designed to provide homeowners with access to cash while allowing investors to share in any potential future appreciation of the home's value. With <a href="https://unison.com">Unison</a>, for example, homeowners can access up to 15% of their home’s current value in exchange for an agreed-upon percentage of the home’s future change in value, and never make monthly payments, or accumulate any interest. Instead of living in fear of potential foreclosure, homeowners enjoy a relationship with the Unison Home Partnership Team, who are there to help them through any difficulties they may encounter throughout the term of the agreement. An equity sharing agreement is a loan alternative that could be a great fit for you if you don’t want to deal with the burden of monthly payments, or worry about changing interest rates. You can get a free estimate from Unison with no effect on your credit, and no obligation, <a href="https://estimate.unison.com">here</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.

Learn more about the Unison Equity Sharing Home Loan

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You can leverage your home equity to meet your financial goals and live the life you’ve always wanted–learn more about what it is and how you can tap into its potential in this blog post.

What is Home Equity & How Can You Use It?

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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

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

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-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.

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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 Home Equity Sharing

It’s a truth universally acknowledged that the vast majority of homeowners are simply sitting on an enormous amount of equity. That equity is trapped in their homes, where it can’t be used to help them with their pressing needs like saving for retirement, building a business, renovating the aging house, climbing out of debt, and more. It’s possible to convert that equity asset into cash to tend to those needs, but the usual suspects–home equity loans, HELOCs, reverse mortgages, refinancing–are debt products that, ultimately, might hurt as much as they help due to burdensome monthly payments and debilitating interest rates. 

 Enter the equity sharing agreement. 

 The hallmark of the equity sharing agreement is this: they don’t demand monthly payments or charge interest. In other words, an equity sharing agreement is neither a loan nor a method for replacing debt with, well, debt. 

 <h3>How Does an Equity Sharing Agreement Work?</h3>

 An equity sharing agreement–sometimes called a “home equity agreement” or “shared equity agreement”--empowers the homeowner to tap into their otherwise illiquid home equity, giving them a percentage of the home’s value in cash. In exchange, instead of the monthly payments and interest charges that other methods offer, the homeowner will pay them the original amount plus an agreed-upon percentage of the home’s change in value. Depending on the company with whom one partners, you can settle the agreement after a number of years, or at the sale of the home, when you decide to move. 

 One way to look at it: when you unlock your equity, the company invests in your home and its likelihood to appreciate in value. When you sell your home (or the agreement period is up), they receive their return on that investment. If the value of your home doesn’t increase much–or even decreases–their return won’t be as high. A loan builds in interest rates in order to ensure that the lender makes money, but equity sharing agreements have rooting for you and your home built into their very anatomy. 

 Consider <a href="https://unison.com">Unison</a>, who pioneered the equity sharing agreement. A key step in the Unison application process is the appraisal, in which an independent, third-party appraiser tours the home and, taking note of its condition and characteristics, as well as the recent sale prices of comparable homes in the area, estimates its current value. Unison takes that number and applies a 5.0% Risk Adjustment to establish the home’s “starting value.” 

 With Unison, the homeowner unlock up to 15% of the appraised value. Once they receive the funds, they are free to use it however they wish–popular uses include performing renovations, erasing debt, preparing for retirement, diversifying investments, and starting a business. Unison Agreements have a set term of 30 years, which means that the homeowner can choose to buy out the Agreement during that time, or, sell their home and pay Unison out of the proceeds. 

 Usually, the agreement ends when the property is sold. However, if the homeowner chooses to buy out the agreement instead, another appraisal is conducted to determine the home’s “ending agreed value.” That number is compared to the “starting value” to discover what the change in value has been (for example, has the house increased in value by $100,000?). Ultimately, the homeowner will pay Unison the agreed-upon percentage of that change, as well as the amount of the initial funds the homeowner received.

 <h3>Equity Sharing Agreements VS Other Options</h3>

 Now that you know a bit more about that new kid on the block, the equity sharing agreement, let’s examine it in the context of its equity-accessing compatriots. 

 Home Equity Loan 
Also known as a “second mortgage,” a home equity loan enables a homeowner to borrow a specific amount of money from a lender based on the property's appraised value minus any outstanding mortgage balance. The funds arrive as one lump sum, and the loan is repaid in installments over a fixed term–with interest.

 Equity sharing agreements also provide homeowners with a lump sum up front; however, the homeowner does not make regular payments, and that initial sum does not accumulate interest. 

 HELOC 
The <a href="https://www.unison.com/blog/about-helocs/">home equity line of credit</a> (HELOC) is precisely what it sounds like–a revolving line of credit in which the homeowner borrows against the equity in their property. Think of it like a credit card with a set credit limit; you can use it, or not, as you please. During the initial draw period, you only need to pay off the interest on whatever you did spend. However, that period is followed by the repayment period, during which the entire balance must be repaid. 

 The interest rates for HELOCs are usually lower than that of credit cards, but they also tend to be variable and therefore difficult to predict and incorporate into planning and one’s long-term budget. 

 As we’ve already established, equity sharing agreements don’t require monthly payments or accrue interest. This is the biggest difference between the two. It’s important to remember that an equity sharing agreement is not a loan. 

 Refinance 
<a href="https://www.unison.com/blog/refinancing_tips/">“Refinancing”</a> refers to the process of replacing an existing loan or mortgage with a new one, usually with more favorable terms. When you refinance a loan, you pay off the existing loan with the proceeds from the new loan, resulting in a new repayment structure and potentially different interest rates or loan terms.

 One of the primary motivations for refinancing is to secure a lower interest rate, which can result in reduced monthly payments or overall interest costs. In addition, refinancing allows borrowers to modify their loan terms; for example, homeowners can extend or shorten the repayment period.

 Cash-out refinancing involves taking out a new loan for more than the remaining balance on the existing mortgage. The homeowner can then use the excess funds however they need. However, refinancing merely replaces one loan with another, and is subject to many of the same disadvantages. While better interest rates are, of course, better, interest is still interest. At the risk of sounding like a broken record, equity sharing agreements do not involve interest. 

 Reverse Mortgage 
A <a href="https://www.unison.com/blog/reverse-mortgage-payments-costs/">reverse mortgage</a> is a loan available to homeowners who are typically at least 62 years old. It allows them to convert a portion of their home's equity into cash, without the need to sell the property or make monthly mortgage payments. The loan is repaid when the homeowner sells the home, moves out, or passes away.

 Ultimately, the loan is typically repaid from the proceeds of the home sale. If the proceeds are insufficient to cover the loan, the remaining balance is usually absorbed by the lender or the Federal Housing Administration (FHA) insurance fund.

 While a reverse mortgage does not require monthly payments during the homeowner’s continued tenure in the home, the equity borrowed does accrue interest. Many who take out equity sharing agreements also pay out the balance of the agreement from the proceeds of selling the home; however, rather than interest, these homeowners pay the agreed percentage of the home’s change in value. 

 <h3>What Are the Benefits of Equity Sharing Agreements?</h3>

 Obviously, two of the biggest benefits of an equity sharing agreement are the lack of monthly payments and interest! It can be difficult to juggle a plethora of monthly payments, and stressful beyond measure to be at the mercy of economically-dependent interest rates. 

 Unison’s equity sharing agreements in particular contain multiple benefits for homeowners. When a homeowner partners with Unison, they have access to the Home Partnership Team, a team of compassionate, knowledgeable members completely dedicated to answering questions, brainstorming solutions to problems, and providing access and exposure to resources. 

 After three years, Unison homeowners can also apply for a Remodeling Adjustment, wherein value added to their home via remodeling or renovations can be subtracted from the ending value, and ultimately reduces what is paid to Unison at the end of the agreement. 

 As we’ve already noted, Unison’s equity sharing agreements are not loans. Because they invest in your home alongside you, they are your partner in a journey. The Unison Homeowner Promise boldly claims, “Owning with Unison is better”--and they are committed to upholding that assertion through accessibility, transparency, empathy, and alignment. 

 Applying for a Unison Equity Sharing Agreement
 Sound good? You can type in your address on the <a href="https://estimate.unison.com/">Unison website</a> to receive a quick, free estimate of how much equity you could access from your home. When you apply, Unison will evaluate your credit, income, and the property–all of which can be done without any financial obligation to you, 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.

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You’ve heard of HELOCs, refinancing, and home equity loans. Learn about the equity sharing agreement: how it’s different, and how it might benefit you.

What is an Equity Sharing Agreement? | Unison

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.

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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

2023 Unison Remodeling Survey Sweepstakes Official Rules 

 
The following official rules (“Official Rules”) govern the Unison’s Remodeling Survey 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>
 <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>
 <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>
 <li>Entry Period. To be eligible for the Sweepstakes, entries must be received between 12:01 a.m. Central Time, May 2, 2023 and 11:59 p.m. Central Time, May 31, 2023 (“Entry Period).</li>
 <li>How to Enter. There are two ways to enter: 
 a. First, eligible entrants can enter the Sweepstakes by responding to and completing the survey questions sent by Unison on May 2, 2023 (and re-sent on May 9, 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 May 2, 2023 and again on May 9, 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. 

 b. Second, eligible entrants can enter the Sweepstakes by emailing sweepstakes@unison.com during the Entry Period with the subject line “Remodeling Survey 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 per each 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>

<li>Prize. The winner of the Sweepstakes (the “Winner”) will receive one (1) prepaid gift card in the amount of Five Hundred Dollars ($500). The actual/appraised prize value may differ at the time the prize is awarded. The prize 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>
<li> Odds. The total number of eligible entries received determines the odds of winning.
 </li>
<li>Selection and Notification of Winner.The Winner will be selected at random. The drawing from among eligible entries will take place on June 7, 2023 at 3:00 p.m. Central Time. The Winner will be notified by email. Winner must acknowledge receipt of notification and acceptance of the prize as directed by Sponsor within forty-eight (48) hours of notification. Winner 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>
<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 Winner list (“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>
<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>
<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>
<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>
<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>
<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> 

By entering the Sweepstakes, You (the entrant), have affirmatively reviewed, accepted, and agreed to all of the Official Rules.

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These are the official rules that govern the 2023 Unison Remodeling Survey Sweepstakes.

Unison Remodeling Survey Sweepstakes | Official Rules

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

 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

 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 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.

Find out how much equity you could access

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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 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 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

For the second consecutive year, our Data Science team here at Unison has released the Home Equity Report. The new report highlights a steep increase in home equity in the past year, with U.S. households today sitting on over $29 trillion worth of home equity! This number is a 19.5% increase from a year ago, and 80% from five years ago. 

 The data in the report shows significant regional variations in home equity values; however, all 50 states saw positive growth in median home equity. Though Hawaii and California (perhaps predictably) have the highest median home values, Utah and Delaware have actually seen the strongest growth. The report features multiple other geo-specific data sets, including the metros with the lowest home equity values and weakest growth.

 Home equity tends to increase with the years of homeownership. The report demonstrates that this increase coincides with many homeowners’ growing financial needs–healthcare, for example, or home renovations. With the additional nebulousness of the current market, the solution is clear. Winfield Xu, our Director of Data Science comments, “Instead of keeping the wealth locked up in their properties, homeowners may want to examine the roles of their homes as an accessible source of liquidity.”

 You can read the full 2022 Home Equity Report <a href="https://contentimages.o-prod.unison.com/images/press/2022_home_equity_report.pdf">here</a>.

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The report notes that U.S. households currently hold over $29 trillion in untapped equity, and highlights how homeowners may want to consider putting their assets to use.

2022 Unison Home Equity Report

Unison’s "Home for the Holidays" 2022 Sweepstakes 

 How do you celebrate at your home for the holidays? In the spirit of the season, we invite you to give us a window into your festivities! Tag Unison on <a href="https://www.facebook.com/MyUnison/">Facebook</a> (@MyUnison) or <a href="https://instagram.com/myunison">Instagram</a> (@myunison) and use the hashtags #UnisonHoliday #2022sweepstakes in your holiday photo or video for a chance to win your share of $1000! Be aware that if you have a private account, you will need to follow us in order for us to see your entries. Don’t have social media? No problem–<a href="mailto:sweepstakes@unison.com?subject=Home for the Holidays Sweepstakes">shoot us an email</a> with your entry!



 There will be two drawings; one on December 16, 2022, and the other on January 3, 2023.



 To be eligible for the first drawing, please make your post or submit your email by midnight (CST), December 14th. The deadline for the second drawing is midnight (CST), January 1st. 

 Five winners will be selected at random via raffle on each drawing date to win a $100 giftcard! 

 We will reach out via DM, Facebook Messenger, or return email (as the case may be), to gather contact information on where to send your prize and confirm that you are eligible to receive it. If the winners do not respond to our message within 48 hours, a back-up winner will be contacted in their stead. The winners will be posted on Unison’s social media and announced in our subsequent newsletter.

 The fine print:
<ul><li>This sweepstakes is in no way sponsored, endorsed or administered by, or associated with Instagram or Facebook.</li>
<li>This sweepstakes is limited to United States residents over the age of 18, and cannot be entered by employees or partners of Unison. </li>
 <li>There is absolutely no purchase necessary!</li>
<li>When you enter the sweepstakes, please note that you authorize Unison to post your photo or video to our social media, feature in our monthly newsletter, or otherwise utilize it without seeking additional permissions (except where prohibited by law).</li></ul>
 

 



 The fine-fine print:
 
The following official rules (“Official Rules”) govern the Unison’s Home for the Holidays 2022 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>
 <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>
 <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>
 <li>Entry Periods. The Sweepstakes consists of two periods of entry that are described below (each, an “Entry Period”). To be eligible for the Sweepstakes, entries must be received within the specified Entry Period.
 First Entry Period: on or after 12:01 a.m. Central Time, November 16, 2022 until 11:59 p.m. Central Time, December 14, 2022.
 Second Entry Period: on or after 12:01 a.m. Central Time, December 16, 2022 until 11:59 p.m. Central Time, January 1, 2023.</li>
 <li>How to Enter. There are two ways to enter: 
First, eligible entrants can enter the Sweepstakes by uploading a holiday-themed photo or video to Instagram or Facebook, including the hashtag #2022UnisonHolidaySweepstakes, and tagging Unison (@myunison on Instagram and @MyUnison on Facebook). If you have a private account, you will need to follow Sponsor in order for Sponsor to see your entries.
Second, eligible entrants can enter the Sweepstakes by emailing sweepstakes@unison.com with the subject line “Home for the Holidays 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 per each 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>
 <li>Prizes. The winner(s) of the Sweepstakes (the “Winner(s)”) will receive one (1) of ten (10) prepaid gift cards in the amount of One Hundred Dollars ($100). Five (5) of the ten (10) gift cards will be awarded to Winner(s) from the First Entry Period, and five (5) of the ten (10) gift cards will be awarded to Winner(s) from the Second Entry Period. 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>
 <li>Odds. The total number of eligible entries received determines the odds of winning.</li>
 <li>Selection and Notification of Winner(s). The Winner(s) will be selected at random. The drawing from among eligible entries from the First Drawing Period will take place on December 16, 2022 at 3:00 p.m. Central Time. The drawing from among eligible entries from the Second Drawing Period will take place on January 3, 2023 at 3:00 p.m. Central Time. Winner(s) will be notified by social media direct message and/or 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 or DM filter to social media message request folder. 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>
 <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>
 <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>
 <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>
 <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>
 <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>
 <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>
 <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.</li>
</ol>
 
By entering the Sweepstakes, You (the entrant), have affirmatively reviewed, accepted, and agreed to all of the Official Rules.

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How do you celebrate at your home for the holidays? In the spirit of the season, we invite you to give us a window into your festivities!

"Home for the Holidays" 2022 Sweepstakes Official Rules

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, 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.

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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. Now featured: the rise of the home gym. 

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

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.

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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. Now featured: the baby blip, and rise of the multigenerational household.

COVID Baby Boom & Multigenerational Households | Unison.com

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 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

 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, 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.

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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 Jia Taylor, Content Marketing Lead

 <h4>Key Takeaways</h4>
<ul><li>U.S. Homeowners gained over $3.2 trillion in home equity since the end of 2021 as home prices continue to soar.</li>
<li>Home prices nationwide increased more than 20% in March 2022.</li>
<li>Housing value surged the most in hot spots like Florida and Arizona.</li>
<li>Home price surge will eventually cause buyers to move into more affordable cities.</li>
<li>How to navigate in this homebuying season.</li></ul>

 In the early stretch of the Covid-19 pandemic, it looked like the housing market was headed for a crash. After all, how could the market survive with millions of Americans out of work and state mandated shutdowns? But despite a very weak economy, homeowners struck gold during the pandemic.

 U.S. homeowners with mortgages (roughly 63% of all properties</a><a href="#_ftn1" name="_ftnref1">[1]</a> ) saw their equity increase by more than <a href="https://www.corelogic.com/intelligence/homeowners-gained-over-3-2-trillion-in-home-equity-in-2021/">$3.2 trillion</a>, since the fourth quarter of 2021, while the U.S. saw the fastest period for <a href="https://www.unison.com/blog/home_equity/">home price growth</a> in recorded history. 

 Now that we’re heading into homebuying season, major shifts in the real estate market are disrupting the housing market’s usual ebb and flow. There’s high demand and low inventory, leading to stunning jumps in home prices and mortgage rates. In addition, many Americans are buying farther away from their home cities and jobs. As homebuying season kicks off, will these changes be long-lasting? Let’s take a look at how it’s shaping up—and what buyers and sellers can do to navigate it successfully.

 <h4>U.S. Home Price Growth Since the Onset of the Pandemic</h4>
 Even as Americans were working from home, homeschooling their children, and practicing social distancing, consumers were still buying homes at unprecedented rates and prices.

 How did the U.S. go from recession to housing boom so quickly? As many strict lockdown measures were lifted, demand for homes increased. Part of the demand came as many Americans, who were spending more time in their homes than ever before, realized their current homes were <a href="https://www.unison.com/blog/renovate_house/">no longer right for them.</a> 

 While demand was high, supply was at a record low, according to the <a href="https://www.thebalance.com/number-of-homes-on-the-market-plummets-5216599">National Association of Realtors.</a> A high demand for housing combined with fewer homes for sale caused home values to shoot up. According to the latest <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/">CoreLogic Home Price Index (HPI) Report</a>, home prices across the nation increased by 20.9% year over year in March 2022, compared with March 2021.

 As the housing market is on a fast-paced upward trajectory, many are wondering: Will the housing boom lose steam? According to <a href="https://www.zillow.com/research/home-value-sales-forecast-may-2022-31041/">Zillow’s forecast model</a>, home prices are widely expected to continue to rise this year, but not at the jaw-dropping rate of 2021. What happens next will depend largely on how both buyers and sellers react to the changing market.

 <h4>Home Appreciation and Depreciation Hot Spots</h4>
 Although house prices skyrocketed in the U.S, the degree of appreciation has varied greatly across cities. Homeowners in some states have seen their home values soar, while owners in other states have seen their values absolutely plummet.

 Fueled by remote work and booming economies, mass migration to the South, Southwest and West drove some of the sharpest increases in home prices. Florida had the strongest appreciation in home price growth with an increase of (31.4.1%), followed by Arizona (28.7%) and Tennessee (26.7%). 

 <img style="max-width:100%;height:auto;" src="https://contentimages.o-dev.unison.com/images/blog/top-10-states.jpg">

 According to the latest <a href="https://www.corelogic.com/intelligence/u-s-home-price-insights/"> Corelogic Market Risk Indicator (MRI)</a> the following top markets are at risk of home price decline. Lake Havasu City-Kingman, AZ is at a very high risk (70%-plus probability) of a decline in home prices over the next year, followed by Prescott, AZ and Bridgeport-Stamford-Norwalk, CT.

 <img style="max-width:100%;height:auto;" src="https://contentimages.o-dev.unison.com/images/blog/top-markets-home-decline.jpg">

 <h4>Impact of Inflation on Real Estate Market</h4>
 Inflation is at its highest point in <a href="https://tradingeconomics.com/united-states/core-inflation-rate">40 years</a> and this has many consumers on edge — especially those looking to buy a home. The U.S. inflation <a href="https://www.usinflationcalculator.com/inflation/current-inflation-rates/">jumped 8.3% in April</a> from a year earlier.

 How does inflation affect home prices? High inflation doesn’t necessarily result in dropping home prices. It simply means that the rate of growth, or how fast prices are going up, may slow down.

 Inflation will certainly have an impact on homebuyers and homeowners, as well as consumers who already own a home. But that impact won’t be as dire as some predict. Homeowners also have record amounts of equity, which means if prices were to unexpectedly drop, they could use their equity and still sell their homes to pay off their mortgages.

 <h4>Urban vs Rural: Where Are People Going Next?</h4>
 It’s no secret that many city dwellers fled to rural and suburban areas after the pandemic hit, as homeowners looked for better housing costs and work-from-home opportunities. According to Redfin, <a href="https://www.redfin.com/news/q1-2022-housing-migration-trends/">record 32% </a> of homebuyers looked to move to a different metro area in the first quarter.

 <img style="max-width:100%;height:auto;" src="https://contentimages.o-dev.unison.com/images/blog/top-10-metros.jpg">

 According to the <a href="https://www.redfin.com/news/january-2022-housing-migration-trends/">Redfin report</a>, San Francisco, Los Angeles, New York, Washington, D.C. and Seattle were the top metro areas homebuyers looked to leave in January, which was unchanged from the fourth quarter of 2021. 

 With a median sale price of roughly $1.4 million, San Francisco is the most expensive place to buy a home in the country. Los Angeles, New York, and Seattle aren’t far behind.

 Concerning prime homebuying destinations, Miami was the most popular locale of all the major U.S. metropolitan areas, unchanged from the third and fourth quarters of 2021, followed by Phoenix, Tampa, Sacramento and Las Vegas.

 <h4>How to Navigate in this Homebuying Season</h4>
 The supercharged housing market that began in early 2020 has thrown existing housing sales in disarray. As it is still an intense seller’s market, here’s what buyers and sellers can do to navigate during this tough housing market.

 <ul><li>Research your ideal location - Before you hit the road to look at homes, do some research on your ideal location. Look at the average home prices and time on the market, which will give you an idea of how hot the market is in that location. Calculate your current payments at current prices and interest rates.</li> 
<li>Prepare for a bidding war. Go into a bidding war with a plan. Get prequalified and preapproved for credit ahead of time and know how much you can afford. You’ll also want to ensure you have adequate documents showing that you have the money for the down payment or closing costs. Also, set a price cap on the amount you are willing to offer to prevent you from paying tens of thousands of dollars over the list price.</li> 
 <li>Be ready to move quickly.The biggest hurdles for many <a href="https://www.nerdwallet.com/article/mortgages/data-home-selling-outweigh-buying">potential sellers</a> are finding a new home and paying too much for a new house. But homeowners still have an advantage, and should get their home in for-sale condition early, so that when you do find a home to buy, you're ready to list and can enter the buyer side with more money to fuel your buying power.</li>
</ul>

 <h4>What's Next?</h4>
 Whether you’re thinking of buying or selling a home, you’re looking at a major life change, notwithstanding what’s happening in the housing market. The current trends we see in the U.S. real estate market inform us only to a certain extent. Only time will tell what the housing market has in store, but in an unpredictable market, now might be a good time to start planning your financial goals.

 The start of your homeownership journey can be challenging during uncertain times, but it’s doable. Imagine a path to homeownership that started with a partner who shares in the ups and downs of the journey with you. Until now, the only way to finance a home was by taking on debt. Through a residential equity agreement, Unison helps homeowners access their equity flexibly with no monthly payments or interest. To learn more, click <a href="https://www.unison.com/how-it-works/">here.</a> 

 <a href="#_ftnref1" name="_ftn1">[1]</a> Homeownership mortgage source: 2016 American Community Survey.

 
 
 
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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What is the current and future state of home ownership? A look at home appreciation and depreciation, the impact of inflation and where homeowners are moving. 

The State of Home Ownership | Unison® Equity Sharing | Blog

By Jia Taylor, Content Marketing Lead

 <h4>In This Article</h4>
<ul><li><a href="#How">How credit scores are calculated.</a></li>
 <li> <a href="Factors">Factors that impact your credit score.</a></li>
 <li><a href="Good">What is considered a good credit score?</a></li>
 <li><a href="Rebuild">How long does it take to rebuild your credit score?</a></li>
 <li><a href="Tips">Tips to increase your credit score.</a></li></ul>

 Whether you’re looking to get a mortgage for a house, take out a loan to buy a car, or get your small business up and running, your credit is essential to achieving your financial goals and can impact your financial health and wellness.

 Establishing good credit may seem like a complicated process, but it doesn’t have to be an ordeal. If you want to increase and maintain a high credit score, there are simple things you can do. Here, we break down the five biggest factors that affect your credit score and five easy steps you can take to give your credit score a boost.

 <a id="#How"><h4>How Credit Scores are Calculated</a></h4> 
You may realize that you don’t have just one credit score. Credit scores are calculated by complex mathematical algorithms called <a href="https://www.capitalone.com/learn-grow/money-management/understanding-types-of-credit-scores/">credit-scoring models</a> that analyze one of your credit reports from <a href="https://www.capitalone.com/learn-grow/money-management/three-credit-bureaus/">three major credit bureaus</a>–Experian, TransUnion or Equifax. The reason we have so many different credit scores is that not all credit-scoring models measure the same things in the same way. 

 Credit scores may differ for several reasons, including the company providing the score, the data on which the score is based, and the method of calculating the score. Credit scores may also differ because not all lenders and creditors report information to all three major credit bureaus. 

 While the credit-scoring models among the three major credit bureaus are different, the vast majority of lenders use credit scores calculated by FICO and VantageScore scoring models. Instead of focusing on one credit score, it’s more important to look at the range your credit score falls in and the principles used to create them.

 <a id="#Factors"><h4>Factors that Impact Your Credit Score</h4></a> 
By understanding what factors impact your credit score, you can take steps to improve it. The credit data in your credit report is used to calculate your <a href="https://www.experian.com/blogs/ask-experian/fico-score-what-it-is-and-why-its-important/">FICO Score</a>. This data is grouped into five categories. In general, here are the factors considered in calculating your credit score, keeping in mind there are many different credit-scoring models.

 <img style="max-width:100%;height:auto;" src="https://contentimages.o-prod.unison.com/images/blog/fico-score-chart.png">

 1. Payment History (35%) Keeping up with your payments has the <a href="https://www.experian.com/blogs/ask-experian/what-factor-has-the-biggest-impact-on-credit-score/">biggest impact on your credit score</a>. It makes sense–lenders are naturally invested in your ability to pay back debt promptly and punctually. If this is not your forte, you can set up automatic bill payments and reminders about upcoming and recurring due-dates. It’s a good idea, too, to establish and maintain a monthly budget or savings plan.
 2. Amounts Owed (30%) After payment history, the amount you owe as represented by your credit utilization ratio, is the second most important factor in your credit scores. FICO scrutinizes the amount of money you owe versus how much credit is available to you. For example, if your card balance is $500 and you have a spending limit of $2,500, your credit utilization is $500/$2,500 or 20%. As a general rule of thumb, it’s best to keep your revolving credit balances under 30% of your credit limit, but financial experts recommend keeping your credit utilization <a href="https://www.cnbc.com/select/how-to-get-the-best-credit-score/">under 10% </a> if you want an excellent credit score.
 3. Length of Credit History (15%) In general, the longer an individual has had credit, the better their score. However, even people who have not been using credit long can get a good credit score, depending on their payment history and amounts owed. 
 4. Credit Mix (10%) Credit mix means having a variety of credit accounts and how well you manage the blend. To obtain high credit scores, you need a strong mix of accounts which might include a car loan, credit card, student loan, mortgage or other credit products. 
 5. New Credit (10%) Borrowers who open too many <a href="https://www.myfico.com/credit-education/credit-scores/new-credit">new credit accounts </a> in a short period of time can be a sign of risk for lenders—especially for people who don't have a long credit history–and as such can hurt your credit score. 


 <a id="#Good"><h4>What is Considered a Good Credit Score?</h4></a> 
FICO credit scores can range from 300-850, while industry specific scores can range from 250-900.</a><a href="#_ftn1" name="_ftnref1">[1]</a> According to <a href="https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/">Experian</a>, a credit score of 700 or above is generally considered good.

 FICO
<ul><li>300-579: Very poor</li>
<li>580-669: Fair</li>
<li>670-739: Good</li>
<li>740-799: Very good</li>
<li>800-850: Exceptional</li></ul>

 The higher your score is, the less risky you are to potential lenders. A higher credit score signals you have demonstrated responsible credit behavior in the past, which may make lenders and creditors more confident when evaluating a request for credit.

 <a id="#Rebuild"><h4>How Long Does It Take to Rebuild Your Credit Score?</h4></a> 
When it comes to rebuilding your credit, unfortunately, there’s no quick fix. How long it takes to increase your credit scores depends on what's hurting your credit and the steps you're taking to rebuild it.

 It’s important to keep in mind that negative information like missed or late payments can hurt your credit for years.That’s because negative information can remain on your reports for up to seven years and certain types of negative information can stick around for even longer. For example, bankruptcies might appear on your reports for up to 10 years. But the good news is that most negative information won’t impact your score forever. 

 <a id="Tips"><h4>5 Tips to Increase Your Credit Score</h4></a> 
Now that you know what factors affect your credit and how long it takes to rebuild it, you can be proactive by taking these steps to help increase your credit score.

 1. Pay off debt in a timely manner. Late payments, even a couple of days, can cause your score to drop significantly. Making regular, on-time payment of the minimum amount (or greater) helps lower your credit utilization and will improve your credit score.
 2. Keep your credit card balances low. If your balances are high, outline a strategy to lower the balance owed. Don’t just pay the monthly minimum, if possible. 
 3. Keep credit cards open. If you close a credit card, you might negatively affect your score. Place a small recurring charge on any cards you aren’t using (such as a phone bill or subscription account such as Netflix) to keep the cards active.
 4. Only apply for credit when you need it. Applying for a new account can lead to a <a href="https://www.experian.com/blogs/ask-experian/what-is-a-hard-inquiry/"> hard inquiry</a> which may hurt your credit scores. Hard inquiries stay on your credit report for two years, though their impact on your scores fade over time. 
 5. Dispute any inaccuracies on your credit report. You should regularly monitor your credit reports to make sure no inaccurate information appears. If you find something wrong, contact the credit bureau and the business that reported the inaccurate information as soon as possible.

 <h4>Take the Next Step</h4> 
Whether it’s <a href="https://www.unison.com/blog/homeowner-paid-off-debt-and-remodeled-home-unison/?utm_source=homepage&utm_medium=blog&utm_campaign=increase-credit-score"> paying off credit card debt</a> from renovation costs or medical bills, with a <a href="https://www.unison.com/how-it-works/?utm_source=homepage&utm_medium=blog&utm_campaign=increase-credit-score"> Unison equity sharing agreement</a>, you can access your home equity to tackle your debt, which can improve your credit and increase your credit score–all without a monthly payment or interest. Instead, Unison shares in the future change in value of your home over time, up or down.</a><a href="#_ftn1" name="_ftnref1">[2]</a> 

 You won’t be able to turn your credit around overnight, but if you start taking steps now to improve it, you will see results in time! Learn more about the benefits of a homeowner partnership with Unison. 

 <a href="#_ftnref1" name="_ftn1">[1]</a> https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-is-a-good-credit-score/
</a>
<a href="#_ftnref2" name="_ftn2">[2]</a> Unison will not share in any decrease in value if you sell your home within five years of our investment or if you opt to buy us out without selling your home. In addition, if you do not properly maintain the condition of your home and it results in a significant decrease in your home’s market value, Unison reserves the right to offset the decrease in value with a commensurate upward adjustment for purposes of calculating our share of the change in value of your home.“Estimated Pre-approval Amount” is an estimated value of the amount of equity you can access from your home and it is based on our assessment of automated valuation models (AVMs) and other valuation tools. An independent third party appraiser will determine the final home value, which will impact the amount available to 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.

10-Down-Mortgage-Programs-Which-Are-Best-e1506015529114

Your credit scores are determined by several factors, including payment history and credit utilization. Here are some tips that can help raise your credit score.

Tips to Increase Your Credit Score | Unison® Equity Sharing | Blog

By Jia Taylor, Content Marketing Lead

 <h4>Takeaways:</h4>
<ul><li>Climate change is impacting homeowners across different U.S. markets.</li>
<li>Unison is factoring climate change scenarios into its investments.</li>
<li>Climate-change risks are leading homeowners to take new measures to keep their assets protected.</li></ul>

 Climate change is projected to shape the course of history over the next century, and homeowners across the country are already beginning to feel the effects. 


 From rising sea levels to wildfires to hurricanes and floods, societies have undergone fundamental changes in how people live, changing the way many homeowners think about their largest financial asset.

 In parts of the West, the growing danger of wildfires is already making it harder for homeowners to get insurance, while future sea level rise poses serious threats to the viability of coastal communities. 

 To understand how climate-related risks are having an impact on housing values and the cost of homeownership, researchers at Unison analyze data to identify potential risks and further improve its active management. How will climate change impact housing value and how can homeowners protect their assets in the face of climate change?

 <h4>Rising Sea Levels</h4> 
<a href="https://oceanservice.noaa.gov/hazards/sealevelrise/sealevelrise-tech-report.html">The National Oceanic and Atmospheric Administration (NOAA) reports</a> that sea levels on the U.S. coastline will rise, on average, 10 to 12 inches over the next three decades — in the same time it will take to pay off today’s 30-year mortgage. The projected increase is especially alarming given that it took over a century of climate change for sea levels to rise that much to the present day. 

 According to a <a href="https://www.sciencedaily.com/releases/2020/01/200122150021.htm">study by the University of Southern California</a>, 13 million people in the U.S. alone, could be forced to relocate due to rising sea levels by 2100.

 Unison is already factoring climate change scenarios into its investments. Unison has built proprietary technology to track and monitor sea level rise. In <a href="https://contentimages.o-prod.unison.com/images/im/2021/ESG_Report_2021_final.pdf?utm_content=esg-page-hero">Unison’s 2021 Responsible Investing Report,</a> Unison has overlaid its geographically diverse portfolio with the projectons of sea level rise issued by the NOAA. 

 The analysis shows that in a scenario where sea levels rise by 0.34 meters, none of Unison’s assets currently under management would be impacted by this specific climate risk. Under a more extreme scenario of a 0.91 meter sea level rise, approximately 0.35% of Unison’s investments would be affected.

 <img style="max-width:100%;height:auto;" src="https://contentimages.o-prod.unison.com/images/blog/blog-portfolio-exposure.png">

 <h4>Rising Temperatures</h4> 
Rising global temperatures are triggering climate-related events including dangerous levels of wind, rain and flooding. <a href="https://www.climate.gov/disasters2020">NOAA’s National Centers for Environmental Information (NCEI) reports</a> that 2020 was a historic year of extremes — with 22 separate events causing approximately $95 billion in damages. 2021 followed the same trend; <a href="https://www.americanprogress.org/article/extreme-weather-cost-u-s-taxpayers-99-billion-last-year-getting-worse/">data collected by NOAA</a> shows that last June was the hottest on record across the United States, while this past July was the hottest July worldwide. 

 An increase in temperature can also have a direct impact on the expense of owning a home, such as higher utility costs. Higher temperatures mean more people using electricity for air-conditioning to stay cool or an increase in water usage to maintain lawns. The more demand for these resources, the more expensive they become.

 Unison data shows that transitioning to renewable energy sources such as solar energy, improves homeowners’ carbon footprints and property marketability. Solar shading also helps keep buildings cool by reducing heat gain. According to the <a href="https://contentimages.o-prod.unison.com/images/im/2021/ESG_Report_2021_final.pdf?utm_content=esg-page-hero">U.S. Energy Information Administration: Monthly Energy Review,</a><a href="#_ftn1" name="_ftnref1">[1]</a> residential buildings consumed approximately 22% of the energy produced in the United States in 2020 and were responsible for 20% of total U.S. emissions, or 902 million metric tons of carbon monoxide.

 <img style="max-width:100%;height:auto;" src="https://contentimages.o-prod.unison.com/images/blog/blog-unison-im.png">

 <h4>Wildfires</h4> 
The <a href="https://www.realtor.com/news/trends/why-californias-devastating-wildfires-will-push-home-prices-even-higher/">2020 California wildfires</a> destroyed millions of acres and thousands of structures, causing unprecedented devastation to people’s homes - making it the worst wildfire season on record. The disasters also sent real estate prices climbing in the nearby areas unaffected by fires, as those rendered without homes were competing with city buyers, driving prices up even further. 

 If you live in an area that’s prone to wildfires, some actions can help ensure the safety of your home. One way to be prepared is to read through your current insurance policy or any new policies you are considering and get supplemental <a href="https://www.unison.com/blog/fire_insurance_questions_california/#ftn1">fire insurance</a> if necessary.

 <h4>Floods</h4> 
Homes in coastal areas that are prone to flooding are somewhat ironically desirable to many buyers for their gorgeous views of the water; their prices are correspondingly high. A <a href="https://www.redfin.com/news/flood-risk-home-price-premium-q1-2021/">2021 Redfin study</a> found that homes with a high flood risk sold for 13.6% more than homes with low flood risk during the first quarter of 2021, nearly double the premium of 7.2% in the first quarter of 2019. The reason? Experts say homebuyers may not be aware that they’re purchasing a home in a flood plain or just don’t view it as an immediate danger.

 <a href="https://assets.firststreet.org/uploads/2020/06/first_street_foundation__first_national_flood_risk_assessment.pdf">Research by First Street Foundation</a> reports that 23.5 million properties are at risk of flooding over the next 30 years. Homebuyers can check First Street Foundation’s <a href="https://riskfactor.com/about">Flood Factor Tool</a>, for flood risk data in their neighborhoods. 

 <h4>Hurricanes</h4> 
<a href="https://www.npr.org/2021/11/30/1060158141/2021-atlantic-hurricane-season-ends-third-most-active-year-ever">National Public Radio (NPR) reports</a> that the 2021 Atlantic hurricane season was the third most active year in history. Recent studies indicate that there has been an <a href="https://www.epa.gov/climate-indicators/climate-change-indicators-tropical-cyclone-activity">increased number of Atlantic hurricanes </a> over the past 20 years.

 It also means a higher risk of damage to property in the path of these storms. While typical home insurance policies cover sudden water damage caused by pipes or water heaters, floods caused by natural calamities such as hurricanes require a separate policy. To apply, your community must be registered in the <a href="https://www.floodsmart.gov/">National Flood Insurance Program (NFIP).</a> 

 <h4>What Housing Markets Are Most At-Risk to Climate Change?
</h4> 
According to data from Insurify, coastal cities, perhaps unsurprisingly, are most at risk to climate change. As of 2020, <a href="https://insurify.com/insights/housing-markets-most-at-risk-for-climate-change/">the top five housing markets most at-risk for climate change </a> 
 include:

 <h4>1. Santa Ana, CA </h4>
 <h4>2. Hialeah, FL <h4>
 <h4>3. Paterson, NJ <h4>
 <h4>4. Inglewood, CA <h4>
 <h4>5. Allentown, PA <h4></h4>

 <img style="max-width:100%;height:auto;" src="https://contentimages.o-prod.unison.com/images/blog/blog-insurify.png">

 <h4>Future Impacts of Climate Change
</h4> 
Climate change risks and more frequent extreme events like flooding and wildfires could impact your home value in the future in several ways including: 
<ul><li>Increased Home Damage - rebuilding a home after a calamity can result in large-scale financial loss, making it difficult for a homeowner to fully recover financially.</li>
<li>Decreased Home Values - frequent tidal flooding caused by rising sea levels has been found to diminish the value of homes in at-risk areas.</li>
<li>Higher Insurance Premiums - insurers are mitigating the risk of climate change by raising home insurance premiums, especially in areas prone to wildfires or floods.</li>
<li>Higher Property Taxes - a study by the <a href="https://realestate.usnews.com/real-estate/articles/how-climate-change-could-impact-your-home-value">U.S. News and World Report</a> finds that due to many people leaving some coastal communities because of tidal flooding the tax base is shrinking, causing a property tax increase to pay for infrastructures.</li>
</ul> 

 <h4>The Bottom Line
</h4> 
The unpredictability of climate change makes it difficult to evaluate the risk, but taking action early can make a difference. If you’re buying a home, try to think ahead. Consider the potential risks of climate-change hazards when deciding where to live. 
<ul><li>Check the address on sites such as <a href="https://climatecheck.com/">Climate Check</a>, <a href="https://riskfactor.com/?utm_source=floodfactor">Flood Factor</a> or <a href="https://www.attomdata.com/solutions/home-disclosure-report/">Attom Data Solutions Home Disclosure Report</a> for information on storms, floods, and wildfires. </li>
<li>Ask the seller and listing agent for information about previous flood or fire damage.</li>
<li>Ask a home inspector to keep an eye out for evidence of previous storm or fire damage. </li>
<li>Be aware of the full cost of ownership, including maintenance and insurance and how those costs could rise. </li>
<li>Request a homeowners insurance estimate as early as you can in order to determine its affordability.</li>
<li>When renovating your home, consider potential climate change impacts likely to affect your area.</li>
<li>Consider adding storm-resistant features like hurricane shelters, stronger windows, mesh coverings for vents (in fire-prone areas) or solar panels as a source of renewable energy.</li></ul> 

 Unison’s Home Partnership Team works alongside Unison’s homeowners to help them navigate their homeownership journey, and can provide additional resources. 

 <a href="#_ftnref1" name="_ftn1">[1]</a> U.S. Energy Information Administration: Monthly Energy Review January through December 2021</a>
<a href="#_ftnref2" name="_ftn2">[2]</a> Unison Investment Management: Internal Calculations 2021
</a>
<a href="#_ftnref3" name="_ftn3">[3]</a> Stanford University DeepSolar Database, originally published by Joule December 2018</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.

Solar panel 2

Rising temperatures, extreme weather, and rising sea levels can impact your home’s prices. Here are simple tips to help protect you and your family financially. 

Blog > Unison Culture

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