The Costs Lurking Behind the Mortgage
“I [had] over $10,000 in credit card debt and at the time I didn’t have any hope of getting out of debt,” explains Robert S., a homeowner in Ohio.
Robert’s story is not unique. According to a recent TransUnion report, non-mortgage debt among homeowners is up 6% over the past year, averaging about $8,000 per homeowner. Meanwhile, Bankrate reports that hidden expenses for owning and maintaining a single-family home cost about $21,400 a year.
These ongoing and often unexpected costs can serve as a reality check: homeownership is far more expensive than many realize. Beyond their mortgage, homeowners face rising property taxes, homeowners insurance, home repairs, and utility bills – often alongside car payments, student loans, and childcare costs. Unfortunately, these unexpectedly high costs are among the leading contributors for triggering mortgage delinquencies.
Faced with growing financial strain, homeowners often feel cornered into taking on more debt through traditional lending options – such as home equity lines of credit, home equity loans, or cash out refinancing. Like Robert, many homeowners feel overwhelmed by rising interest rates, inflation, economic uncertainty, and a growing sense that their debt has spiraled out of control.
A Debt-Free Solution
Unlike traditional home financing options, shared equity products (SEPs), otherwise referred to as home equity investments or home equity agreements, offer a much-needed solution: a debt-free way to pay off debt. Thousands of homeowners across the country have relied on Coalition for Home Equity Partnership members to ease their financial burdens.
- James (California) used the money to pay off his and his wife’s high-debt credit cards;
- Matthew (also California) used the SEP proceeds to improve his debt-to-income ratio;
- Brenda (Florida) noted: “I’m completely out of debt, it’s an amazing feeling. It’s something I’ve been working toward for a long time.”
Some homeowners valued the simplicity and speed of the process, but they mostly appreciated that SEPs have no interest rates and no monthly payments. The ability to receive an upfront lump sum payment to tackle life’s needs, all without adding an extra monthly payment, is – according to homeowners – “life changing.”
As economic pressures mount, the path to financial security for homeowners may no longer lie in conventional financing. Instead, innovative tools like SEPs are offering a new kind of flexibility that does not trade short-term relief for long-term debt. Homeownership – amid its many rewards and values – may remain uncertain and expensive, but new solutions are emerging, and for homeowners like Robert, that can make all the difference.
For more information, read our FAQ guide or contact info@homeequitypartnership.org.