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Between now and 2018, up to 43% of US homeowners will be affected by a home equity line of credit reset

Between now and 2018, up to 43% of US homeowners will be affected by a home equity line of credit reset — but per a study by TD Bank, many are unprepared. “Many HELOCs allow borrowers to draw for 10 years and make interest-only payments,” said Mike Kinane, senior vice president of home equity at TD Bank. “When this draw period ends, borrowers are required to pay principal and interest, which may increase their monthly payments. It’s important that HELOC borrowers plan ahead and review their contract to determine the best course of action based on their current and future financial situations.” Many homeowners used HELOCs during the housing boom to finance large expenses like home renovations and college tuition. With home values rising, HELOCs were a good way to consolidate debt. But now, with the 10-year interest-only period ending, many of these homeowners are going to see their payments spike. And a good many of them are unprepared, per TD Bank. The bank’s study found that 23% of surveyed homeowners didn’t have financial plans in place to handle the end of their draw periods. Many were unaware of the reset date described in their HELOC contracts, and just 19% understood that a HELOC reset would increase their monthly payments. Thirty-four percent thought a reset would reduce their monthly payments. Perhaps more worrying, 60% of respondents who said they had no plan for their HELOC resets also said they had no plan to seek guidance from a lending professional. Source: MPA — Want to go over alternatives if you have experienced a reset or see one coming?  Contact us.

The Urban Institute’s Housing Finance Policy Center released a new study proving what we already know to be true: women are better at paying their loans than men. To drive the point home, the Urban Institute conducted a study using public data filed under the Home Mortgage Disclosure Act, the federal law that requires all but the smallest lenders to report annually, and CoreLogic, a provider of consumer, financial and property information, analytics and services. From 2011 to 2014, female-only borrowers carried a FICO score of 741, versus male-only FICOs around 739. This is true even though women earn an annual income of $70,160 and men earn an annual income of $97,670. So, while men make much more money each year on average, women were still better able to keep up with their credit scores. Source: HousingWire
Builders are creating housing developments that offer a small-town feel — which they believe many buyers are seeking in a community nowadays. A growing number of traditional neighborhood developments are looking to recreate village life, offering up old-style communities with “leafy streets of historic-looking homes with porches and sidewalks, shared green spaces and shops.” This marks a shift away from posh, gated golf-course communities. Instead, builders say they want to give home owners a stronger sense of home and a community that fosters greater mingling with neighbors and community, with neighborhood coffee shops and the town dentist all within walking distance of residences — “Picture Andy Griffith’s Mayberry with high-speed Internet.” Source: The Wall Street Journal