Spring Cleaning: Finances Edition

Personal finance is not a common dinner table topic. In fact, most people find it “taboo” and never bring it up. While they don’t like to talk about it, a recent survey showed that 77% of Americans report feeling anxious about their financial situation. 

Are you thinking, “that sounds like me, but what can I do to stabilize my personal financial situation?” Start here! 

Evaluate. 

It’s hard to create a budget without knowing where your money is already going. You may be able to get an idea of this by reviewing transactions from your credit/debit cards and bank account(s) for the last few months. 

If you don’t know where to begin reviewing your spending, consider a money management app. Some of these apps include:

• PocketGuard – This app aims to help simplify your finances. The free version allows you to connect two financial accounts, track recurring bills and create spending categories. 

• Honeydue – If you’re managing money with a partner, consider Honeydue. This free app categorizes spending and allows you to set limits. You can also connect your accounts and set up bill reminders to help avoid late fees. 

Although other paid options exist, start with a free one to avoid getting roped into another monthly expense.

Prioritize. 

Once you have a picture of your spending, you may notice a lot of “leaks.” Many people think of large purchases like homes as the biggest drain on their finances, but the small things add up. 

• Are you purchasing a $5 cup of coffee in a drive-thru every morning? That’s $1,300 per year if you do it five times each week! 

• How many subscriptions or memberships do you have? Are you getting your money’s worth for all of them? 

• Do you have any auto-renewals you may need to reconsider? For example, if your car insurance renews automatically, you can’t be sure you’re getting the best rate. You may want to shop around to see if you can find a better deal. 

• Do you have any unnecessary or avoidable expenses? This would include things like late fees tacked on to a utility bill if it isn’t paid by the due date. 

Learn. 

Before you can get to the “planning” stage of creating a budget, familiarize yourself with basic personal finance. You can do this by learning from someone else – like United Housing’s Financial Coaching Services or by joining the Homebuyer Education program. 

Understanding key financial topics is a must if you hope to plan for the future. For example, it may seem like a good idea to make payments on everything from furniture to Christmas gifts so you can pay just a little every month. But, credit cards and other types of loans charge interest – extra fees when you don’t pay in full every month – meaning those purchases cost more in the long run. 

Plan. 

Once you have a basic understanding of where your money goes, decide what you need. What expenses can’t change? Which ones can go down or go away? And as you free up money by cutting expenses, what should you do with it? 

Plan where they’ll go. Free budgeting apps like EveryDollar or Goodbudget can help you with “zero dollar” planning. With this method, you’ll assign every dollar you bring in for a specific purpose – like paying down debt, covering expenses, putting into savings and more. 

While you’re planning, consider paying down your debt a top priority. First, target debts with the highest interest rates (like payday loans or credit cards). Once those expenses are gone, focus on the next-highest. This strategy will slowly reduce your expenses over time, allowing you to put more money into savings or planning large expenses like a home purchase. 

Still have questions? Look no further than United Housing’s education and counseling programs. We’re happy to help! 

What is Fair Housing and how does it impact first-time homebuyers?

April is Fair Housing Month – a time to not only commemorate the signing of the Fair Housing Act and recognize its impact on first-time homebuyers over the years but also an opportunity to understand the importance of developing innovative solutions to ensure fair and equitable housing for all communities now and in the future. 

History

On April 4, 1968, Dr. Martin Luther King Jr. was tragically assassinated in Memphis while advocating for better living and working conditions for Black and POC communities. In response, President Lyndon B. Johnson signed the Fair Housing Act, which promoted equal access to housing opportunities and eliminated discriminatory practices affecting mostly minority homebuyers. 

Impact

Under the Fair Housing Act of 1968 and the Tennessee Human Rights Act, it is illegal to discriminate based on one or more protected classes: race, color, national origin, religion, sex, familial status and disability. These laws aim to protect all homebuyers from predatory practices, like high interest rates or unfair loan terms, offer more opportunities for buyers to find a home without facing discrimination and promote more inclusive communities. 

Unfortunately, the system is imperfect, and many individuals and families are still affected by inequities. For example, several limiting factors that disqualify marginalized communities from purchasing a home are disguised or perpetuated in underhanded ways, including redlining and gentrification. This is especially true in Memphis. 

Solution

Organizations like United Housing and Convergence Memphis are committed to promoting fair housing solutions and helping first-time homebuyers find accessible, sustainable housing options. UHI’s programs, like Homebuyer Education, down payment assistance and affordable lending opportunities, are designed to help buyers successfully navigate their homeownership journey without falling victim to predatory lenders and discriminatory practices.

Let’s continue to work toward creating a better and brighter future for first-time homebuyers in our community this Fair Housing Month. 

If you are a real estate professional, lender or bank and would like to partner with United Housing to support fair housing opportunities in Memphis and Shelby County, please reach out to Roni Hagy at rhagy@uhinc.org. 

Build, buy new or renovate – what's the best option for you?

When it comes to purchasing your first home, there are several options to consider: building a new house, buying a newly constructed home or renovating an existing property. Each of these options has its advantages and disadvantages – and what works best for one person may not work for another. Here’s what you need to know.

Building a home from the ground up

Pros: 

• Customization: Building a new home allows you to create a space tailored to your preferences, style and needs. You have control over the floor plan, finishes and materials used throughout the property.

• Greater resale value: Newer homes tend to stand out on the market and generally have a higher resale value due to novelty and energy efficiency. 

Cons:

• Cost: Building a new home can be more expensive, especially if local builders are not focused on starter homes.

• Time: From decision-making and managing the project to ordering materials and working through weather conditions – the construction process can be lengthy and may require a significant investment of time.

Buying a new home

Pros: 

• Energy efficiency: Purchasing a newly constructed home means you can enjoy the benefits of modern, energy-efficient technology and features.

• Lower maintenance costs: New homes often require fewer repairs and updates compared to older properties, which can save you a lot of money in the first few years of owning the home. 

Cons:

• Customization: While you may be able to select some finishes and overall decor, you generally have less control over the layout and design of the home.

• Availability: The inventory of new homes on the market does not meet the demand of those who want to buy, making it more challenging to find a property that meets your needs, preferences and budget.

Renovating an existing home

Pros:

• Cost: Depending on the scope of the project, renovating an existing home can be a more cost-effective option. United Housing even has loan products designed to help people make needed repairs. 

• Character: Older homes often have unique architectural features and a sense of charm that can be difficult to replicate in newly constructed properties. 

Cons:

• Unexpected expenses: Hidden issues or unforeseen repairs can significantly increase renovation or maintenance costs and extend your home’s project timeline. 

• Limited energy efficiency:  Older homes may not be as energy efficient as new construction, which could lead to higher utility costs. 

There is no one-size-fits-all solution to homeownership. Weighing the pros and cons of each option will help you determine what is the best fit for your budget. Take the time to research, consult with real estate professionals and explore the housing market to make the best decision for you. 

If you live in Memphis, you can start by enrolling in our Homebuyer Education program. The 8-hour course offers information on credit management, qualifying for a mortgage, working with an agent and more. Register today at https://www.uhinc.org/education-counseling. 

What is the MLS and do you need access to it to buy a home?

Interested in buying your first home? You’ll likely hear about the MLS system along the way. The MLS is the Multiple Listing Service – a home aggregator that REALTORS® use to share information about available properties in your region. 

How does it work?

When agents list properties for sale, they add them to the MLS database, giving other REALTORS® in the area access to view the listing and share it with their clients. MLS listings include photos and detailed descriptions of the property. There are guidelines on what you can and can’t post that help standardize listings and keep the market fair.

How can I access the MLS? 

Many online databases, like Zillow and realtor.com use the MLS to pull information on properties. While you can use a limited version of the MLS by reviewing these websites, your options expand exponentially when you work with a REALTOR®. They have access to historical data within the system, which can tell you a lot about changes to a property over time. For example, if you want to see when an addition was made, your REALTOR® may be able to find that information in the MLS – and it wouldn’t be available on an online site.

One interesting thing about Memphis’ local MLS is its unique tool called MAARdata. Appraisers throughout the MLS service area (West Tennessee) submit property information while reviewing different homes. This data is compiled and provided to REALTORS®, helping them make informed decisions when supporting clients. For example, appraiser data in combination with comparable home prices offered in the MLS can give buyers insight that helps them price their homes competitively. Buyers can use the same data to build informed offers. Our local MLS is the only one with a tool like this in the country! 

Why should you work with a REALTOR®?

Without a professional agent who is a member of your local REALTOR® association, you can only access a small portion of available listings. REALTORS® and brokers pay membership dues to access the full MLS database, which gives you access to exclusive listings in your region. This is especially important for people who are selling a home. When you list a property on your own or with an agent who is not an MLS subscriber, your property will not appear among the consideration set for many other real estate professionals in the community. This doesn’t mean that your property won’t sell, or that REALTORS® won’t be able to see it, but it does mean that the pool of people who will know about your property is smaller.

There are also definite rules and guidelines that REALTORS® have to follow when using the MLS. All these rules are in place to protect homebuyers and sellers – meaning you can trust that the deal you’re working on is legitimate. 

For example, a new regulation implemented in August of 2024 mandates REALTORS® create a buyer’s agreement with you that outlines your payment schedule and structure. It also disallowed agents from posting commission rates in the MLS to help keep deals competitive. When you work with an agent not bound by these rules, you could risk getting into a challenging situation.

While you can browse online databases to get an idea of what’s out there, working with a REALTOR® will expand your options and get you closer to finding the perfect home for you. 

Are you looking to buy a home? United Housing has properties for sale in Memphis and has licensed REALTORS® on its team who can help you. Contact Will Freiman at wfreiman@uhinc.org to learn more and connect with an agent. 

Creating access to homeownership with Convergence Memphis

Homeownership is a significant milestone in a person’s life, but for many first-time buyers – particularly those in Black and POC communities in Memphis – it can feel like an unattainable dream. That is why our partners at Convergence Memphis host events, like its upcoming Land Expo on Feb. 22, 2025, to come up with solutions to help bridge the gap in home accessibility and affordability for minority and low-income households in our community. 

At the Land Expo, landholders and property owners will showcase available lots within the city’s limits – space where we hope our partners in the industry can build and develop starter homes and other innovative, accessible housing options. 

Why host a Land Expo?

When real estate professionals join forces, they can pool their expertise, resources and networks to develop innovative approaches that help break down barriers to homeownership. Below are a few reasons why these partnerships are crucial. 

It addresses systemic issues.

The Land Expo not only showcases viable housing opportunities, it also helps spread awareness about the systemic issues that have historically made homeownership more difficult for Black and POC homebuyers. By collaborating with local experts, we can better target solutions and strategies to promote equity in the housing market. 

It expands access to resources.

By teaming up with local experts, like community development committees, investors, agents and mortgage lenders, we can better expand access to valuable resources like education, financial assistance, lending options and affordable housing. These resources are critical for first-time homebuyers to have a successful transaction. 

It fosters innovation.

Collaboration sparks innovation, like new ideas and approaches that can serve the needs of first-time homebuyers. By combining diverse perspectives and experiences, we can develop creative solutions to make homeownership more attainable. 

It helps strengthen our community. 

Homeownership has a positive ripple effect on the community – leading to increased stability, economic growth and overall well-being. By working together to support first-time homebuyers in underserved communities, we can contribute to the long-term success and prosperity of neighborhoods in Memphis and Shelby County. 

To learn more or get involved with Convergence Memphis, contact Kelbert Fagan at kfagan@uhinc.org. 

How to avoid real estate scams

If you want to purchase your first home, the real estate market is an exciting place to explore. To protect the largest purchase of your life, you must be aware of scams that could put your financial security at risk and your hunt for a dream home on pause. Here are a few quick tips to help protect yourself and ensure a safe homebuying experience. 

Using an unlicensed agent

Always work with a licensed real estate agent and verify their credentials. Working with an unlicensed agent can increase your risk of falling victim to fraud. Luckily, first-time homebuyers in Memphis and Shelby County can rely on United Housing, Inc. to connect them with a team of professionals, including a REALTOR®, to help them move forward in their home search without fear! REALTORS® have tools, resources and a code of ethics they must follow. Their guidance can help you spot scams and avoid homebuying pitfalls. 

Illegitimate financial partners

Choosing the right mortgage lender and learning how to spot a mortgage scam are two key steps in the homebuying process. Mortgage scams begin by offering more favorable mortgage terms for borrowers, often involving loan flipping – a practice where the same loan is repeatedly refinanced to generate more overall fees for the lender. United Housing’s Cherry Mortgage is a great, affordable option with no down payment, a fair interest rate and simple qualifications. Working with an organization like United Housing or a legitimate financial institution can help you feel more secure in your financing option. 

Trust your instincts

Work closely with your REALTOR® and their recommended legal partners to review all materials before signing any contracts. Don’t ignore any red flags or uneasy feelings – investigate further and ask questions! For example, don’t let a seller convince you not to do a home inspection or try to convince you to work with an inspector that you haven’t vetted. Alongside your REALTOR®, your partners at United Housing can offer recommendations for licensed inspectors in the area. 

The best way to build strong instincts is to go into the process with a solid understanding of what to expect. That’s where United Housing’s Homebuyer Education Course comes in. We will walk you through homebuying step-by-step to ensure you’re confident when shopping for your house. Because you know what to anticipate, alarm bells along the way should signal a sign to stop and ask more questions. 

Take the necessary steps to protect yourself and your future home. We’re here to help you on your journey, and we would love to see you in an upcoming HBE Course! Click here to learn more. 

We offer veteran and special needs services!

Did you know United Housing, Inc. provides affordable, accessible rental units to individuals with disabilities, seniors and veterans? Through partnerships with Alpha Omega Veterans Services and SRVS Memphis, among others, UHI helps individuals and families find quality housing to foster their independence. Learn more about these programs below.

The need: greater disparities exist. 

Although veterans have access to housing resources, such as loans through the Veterans Association (VA), HUD programs like Veterans Affairs Supportive Housing (VASH), among others, studies have shown that ex-service members have long been at a greater risk of homelessness than the general population. Similarly, people with disabilities have a harder time finding housing. The pool of units and available homes with accessible features is significantly smaller than the general housing stock. If a person’s disability impedes their ability to work for a living wage, inadequate Supplemental Security Income (SSI) may not be enough to make ends meet regarding housing. As a result, disabled renters are “priced out” of housing at rates higher than that of the general population.

Operation home: Veteran rental units

UHI’s scattered-site veteran rental units across Memphis and Shelby County offer affordable, quality homes for veterans and military families seeking transitional housing. These two- and one-bedroom units are wheelchair accessible and semi-furnished, ensuring a comfortable and safe living environment for those who have served our country.

Rental program for individuals with disabilities

Through our community partnerships, UHI provides rental homes with essential features and services tailored to the unique needs of seniors and adults with disabilities. These homes offer in-home personal care services, fall prevention features and safety installations to create a secure environment that promotes independent living. 

These programs prioritize affordability, accessibility and comfort to empower individuals and families in need of quality housing. To learn more and get involved, click here or contact Valerie Peterson at vpeterson@uhinc.org. 

Avoiding probate – how to ensure your home and assets pass to the right people.

The passing of a loved one is a difficult and emotional time. But, there are ways to alleviate some of the stress and confusion that comes with the distribution of assets. Probate – a legal process of transferring assets after death – can be time-consuming and costly. Here are some strategies to help your loved ones avoid probate and ensure your home and assets pass to the right people. 

Establish a living trust

One way to avoid probate is to establish a living trust. A living trust is a legal document that allows you to transfer your assets to the trust during your lifetime. You maintain control over your assets and can change the trust as needed. Upon your passing, the assets will be transferred to your beneficiaries without going through probate. 

Name a beneficiary

The probate process applies to accounts and properties left in your name at the time of your death. By naming a beneficiary, you bypass the probate process, allowing your loved ones to access the assets more quickly and efficiently. 

Joint ownership

Joint ownership of assets, like your home or bank account, allows the surviving owner to automatically assume ownership upon your passing without going through probate. However, be cautious with this method, as joint ownership can have potential risks and tax implications. 

The best thing to do is to speak with an attorney to get your assets in order. They can provide you with the most updated information and recommendations to support a smooth passing of assets in the case of your death or the death of a loved one. Taking proactive steps can provide peace of mind for you and your loved ones during a challenging time. 

What is foreclosure and how does it happen?

You may have heard the term “foreclosure,” or you might even know someone who has been through it. In either case, the process can be overwhelming, especially if you don’t understand how it works and what causes it. In this blog post, we will walk you through the process and offer options to help prevent it from happening to you.  

What is foreclosure? 

Foreclosure is a legal process that occurs when a homeowner can’t make their mortgage payments, and the lender (typically a bank) takes possession of the property. This allows the lender to sell the home and use the proceeds to pay off the remaining mortgage balance. 

What causes a foreclosure? 

Foreclosure can happen due to financial hardships, such as loss of income, high medical bills, adjustable-rate mortgages, divorce or separation, or negative equity. 

The foreclosure process in Tennessee goes as follows:

• Day 1: Borrower misses monthly mortgage payment.

• Day 16-30: Mortgage servicer applies late charges and starts attempting to make contact with the borrower.

• Day 45-60: Servicer inspects the property for occupancy and solicits loss mitigation options to help cure the default.

• Day 90-105: Servicer sends a “demand” or “breach” letter to the borrower to share violation of mortgage terms.

• Day 120-150: Servicer refers loan to foreclosure department. Hires attorney to initiate foreclosure proceedings. 

• Day 150-415: House sold at foreclosure sale or auction. Borrowers in Tennessee, a non-judicial state, have as little as two months to make arrangements and vacate the property.

• Day 150-415+: After the sale, officers force borrowers out immediately following the auction by eviction.

According to THDA, foreclosure can happen in Tennessee either by judicial action or by newspaper advertisement (Sheriff Sale). The most common foreclosure action in Tennessee is by advertisement. In this procedure, the lender’s attorney advertises the property for sale in a newspaper for three weeks. Following that, the property will be sold to the highest bidder. 

How can I prevent a foreclosure?

To avoid foreclosure, contact your lender and let them know about your financial situation. In most cases, lenders will offer to explore other solutions like readjusting your payment plan or exploring loan forbearance. Another option is to speak with a HUD-certified housing counselor to discuss your options. 

UHI’s education programs include financial coaching and a Housing Stability Program that offers foreclosure and rental counseling services. Here, you’ll learn how to work with your servicer to determine repayment options, avoid scams and more. If you’re ready to get started, apply for our program today. 

Why you should enroll in Homebuyer Education (even if you’re not ready to buy a house right now)

Do you dream of owning your own home, but aren’t sure if it’s feasible in the near future? You’re not alone. The housing market has been tough, with home prices and mortgage rates skyrocketing. But, with a good credit score and a strategy to approach your down payment, homeownership doesn’t have to be out of reach. United Housing’s Homebuyer Education program provides a comprehensive, 8-hour course that covers essential topics to guide you through homebuying. 

Enrolling in UHI's Homebuyer Education course is a great first step, whether you want to purchase a home in the next few months or years. Here is why you should sign up today, even if homeownership seems far off. 

Get a head start on financial prep

Understanding your financial situation is a crucial aspect of the homebuying process. UHI’s course will guide you through credit management, creating a budget and saving for a down payment. Learning these skills early on will prepare you to make informed decisions when purchasing a home. 

Build confidence by working with professionals 

Navigating the real estate market can be tough, but it doesn’t have to be! The course covers working with real estate agents, lenders and home inspectors to ensure you feel comfortable and confident in your homebuying journey. 

Learn about loan options and mortgages

Not all mortgages are created equal – and it’s important to understand the different types available to you. By learning about mortgage and loan options and their eligibility requirements, you can feel empowered to choose the best option for your financial situation.

Understand the responsibilities of being a homeowner

Owning a home is a lot more than just paying a mortgage. UHI’s Homebuyer Education course shares information on home maintenance and care, helping you prepare for the ongoing responsibilities of homeownership. 

Access valuable resources and support 

After you complete the course, you’ll receive a certificate and access to UHI’s network of resources – from getting a home loan using the Cherry Mortgage program and working with our team to help you buy down mortgage points to simply chatting with our team of professionals to walk you through the challenging parts of the buying process. Our course is also a certified education program, which may be required for some financing programs! 

When you enroll in UHI’s Homebuyer Education course, you invest in your future. Register today and turn your homeownership dreams into a reality. 

When renting is a good housing option

One of our primary goals is to help people become homeowners. Sometimes, that makes people think that we’re “anti-renting.” But that’s not true! While we believe homeownership is a great long-term option for building strong neighborhoods and financial stability, we recognize that a housing mix is integral for healthy communities. We also know that renting is a better option for some circumstances and stages of life. Here are some examples of when renting might be better than buying a home. 

You’re not sure where you want to live long-term. 

Homes build wealth as a mid-to-long-term investment. To get a good return on your home purchase, you need to make payments toward your principal balance while your home appreciates in value. Both of those factors take time. If you’re unsure you want to live in a city or community long term, saving money for a down payment may be better while deciding where you want to plant your roots. Then you’ll be ready to make a purchase in a city you plan to call home for years to come. 

It would be hard for you to manage a house physically.

When you buy a house, it’s your responsibility. If something breaks, you must fix it or pay someone else to. Caring for a property alone may be hard if you have physical limitations. And if you are living alone, are on a fixed income or don’t have extra funding to hire people to help you, things can get out of hand quickly. When you rent, your landlord will be responsible for regular maintenance and routine repairs. All you have to do is clean your unit and follow your tenant guidelines. 

You’re working on reducing your debt.

Purchasing a home may not be wise, or even possible if you have significant debt. Renting space, especially when you split the cost with other working adults, can reduce how much money you spend on housing and help you put more of your income toward your debt. As you make payments, your debt-to-income ratio will decrease, positively impacting your credit score. It may take time, even years, but paying down your debt while renting will put you in a better financial position. And, that can support your future home purchase! 

Your income fluctuates.

If you’re an entrepreneur, shift worker or work in a profession where your income varies from month to month, then buying a home might not be the right option for you right now. To get approved for a mortgage, you have to demonstrate proof of consistent income, and if you cannot demonstrate your ability to pay, you may not be approved. This isn’t to say that you can’t buy a home if you’re not a salaried worker – but it might be wiser to wait until you have a better understanding of your average monthly income and can build an emergency fund that could cover you if you were short during a month. 

We can help you make it happen. 

While renting might be the best choice for your life right now, if you dream of owning a home, you can start working toward that goal today. No matter your circumstance, United Housing wants to help you make it happen. The process might take time and effort, but we can help you develop a plan to direct you toward homeownership. Connect with us today to learn more about our Homebuyer Education programming, financial counseling, credit support, down payment assistance and other programs. 

Value appreciation isn't guaranteed – here's what you can do to help your home become more valuable over time.

What is a home’s appreciation rate? When a home appreciates, its resell value increases, allowing owners to build equity and potentially profit from their investment. It’s hard to predict a home’s exact rate of appreciation, as it’s based on several factors like market conditions, location, property maintenance and inflation. But, some key factors play a significant role in adding to a home’s value. 

If you are looking to help your home become more valuable over time, here are some tips to consider: 

Regular maintenance and repairs

One of the most important ways to maintain and potentially increase your home’s value is by keeping up with regular maintenance and repairs. A well-maintained home looks and feels better while telling potential buyers that the property has been cared for. 

Be sure to schedule annual inspections for your HVAC, plumbing and electrical systems. Preventive maintenance can save you money in the long run and help preserve your home’s value.

Home improvements and upgrades 

Improvements can enhance your home’s overall appeal and functionality, which can increase its value. Start by taking a look at your home’s current layout. Are the tiles in the kitchen cracked? Is the grout in your bathroom stained? Do you need to replace the leaky faucet in the bathroom? Consider consulting with an inspector or contractor to determine which improvements will most likely resonate with buyers. 

Curb appeal 

First impressions matter – especially in real estate. Boosting your home’s curb appeal can affect its value. Start with some simple landscaping. Keep your lawn mowed, purchase new mulch for your flower beds and plant seasonal buds for a pop of color. A welcoming entryway with updated lighting and a fresh coat of paint on your front door can also make a positive impression on visitors. 

Energy efficiency

Energy-efficient features can be a huge selling point for buyers. Not only are they good for the environment, but they also help save on your utility bill. Install a smart thermostat that improves your home’s energy efficiency, replace old appliances with more efficient ones and consider adding solar panels. 

While value appreciation is not guaranteed, proactive maintenance and strategic improvements can help maximize your home’s resale value. Every home is unique, so consider your specific circumstances, budget and long-term goals when planning improvements. 

At United Housing, we provide loans for families looking to improve their homes. Learn more about our 901 Help and Home Repair loan programs here. 

Why are homes considered an investment?

Investment is a catchall word that we hear a lot in our daily lives. You invest time in your job, invest effort in a project or invest money in a bank account. Really, it means that you’re giving something valuable to another entity with the hope that it will return to you more valuable. When you invest time in your job, you’re rewarded for your work with a paycheck. When you invest effort in a project, you give your time and labor for an outcome that will serve your needs. When you invest money in a bank account, you’re lending your assets to the financial institution with a guaranteed return that multiplies over time. 

Similarly, buying a home is an investment. You place money in your home with the hope that it will increase in value over time. But unlike a paycheck based directly on the time you spend at work or the rate of return the bank guarantees you, your home is an investment with risk. We break down how homes can provide long-term value, the general risks and how to make a wise investment. 

How do homes generate value?

Homes can generate value in a few ways. Immediately, homeowners reap the value of consistent shelter. While this is not necessarily a financial benefit, the reduction of stress and pride that comes with owning a home should not be devalued. In Memphis and Shelby County, it’s also possible that owning a home would cost less per month than paying rent – so there could be a monthly financial benefit to homeownership depending on your circumstances. 

But most often when people discuss how homes provide value as an investment, they point to the long-term financial benefits. When you purchase a home, you put money down and secure a mortgage for the price of the home that day. As you pay your mortgage over time, you increase the share of the home that you own. If market conditions are good, your home will also increase in value. Over several years or decades, your home could be worth more money and you own a greater percentage of it. 

What are the risks of investing in a home?

Investing in a home is generally considered a safe choice. However, there are very specific things to consider that may make homeownership or a specific home a poor way to invest your resources. 

• Timing – If you’re unsure where you want to live, buying a house might not be a wise investment. You need time for your home to appreciate in value and to contribute toward your mortgage’s principal balance to see financial returns. If you sell your home too quickly, you may not see a return and could even see a loss. 

• Price – If you buy a too-expensive home, you’re making a risky investment. You need to be able to comfortably pay your mortgage each month or you risk going into foreclosure. We recommend that clients spend no more than 30% of their monthly income on housing. If the house you’re considering is too expensive for your budget, work toward saving more for a down payment or consider looking at homes that are less expensive. 

• Interest – The conditions of your mortgage, especially combined with the timing and price, can make your home an unwise investment. Higher interest rates mean you’re spending more money monthly that isn’t going toward the percentage of your home you own. Over time, that can equate to thousands of dollars lost – money you may not be able to recoup.

How can I avoid losing money in a home?

The more you know going into the homebuying process, the better outcomes you’ll have! We provide homebuyer education courses online with live instructors or through virtual modules you can complete at your own pace. In these courses, you’ll learn about the financial aspects of buying a home and tons of other resources to help you make a wise investment. From there, you can work with one of our counselors to discuss your specific needs and create a plan to find the perfect home for your family. With a team of experienced counselors, real estate professionals and financial partners in your back pocket, you’re on the path toward making a smart investment in your next home! 

Do you have a will? If you have a home, here's why you should.

Having a will is often something people put off, either because they don’t want to think about their mortality or because they believe they don’t have enough assets to need one. However, having a will is crucial if you own a home – here’s why. 

Safeguard your assets

If there is no will when a person passes away, the estate has to go through probate court. This can be a time-consuming and costly process. And, it leaves decisions about your property in the hands of the government – not your loved ones. A will ensures your assets, including your home, are distributed according to your wishes without court intervention. 

Reduce financial stress for your loved ones

If you have dependents or beneficiaries, a will allows you to provide for their future by stipulating who will inherit your home. Knowing that your loved ones will benefit financially from the value of your home provides peace of mind.

With a plan in place for property inheritance, you can help your loved ones mentally and financially prepare to receive your assets. Many families and friends argue over a deceased loved one’s belongings because they did not specify their wishes before death. If you create a will, and talk with everyone about your intentions before you pass, you can smooth over family relations in the wake of your passing.

Minimize taxes and fees

Once a person passes away, federal and state tax liens attach to their property, meaning that the executor of the deceased’s estate must pay the tax bill before they can do anything else. By planning your will, you can potentially reduce taxes on your estate. 

Inheriting a home isn’t free. If you carry a mortgage, your loved ones will be expected to maintain payments. If your home is paid off, they will still be responsible for property taxes, insurance, HOA fees and other associated bills. That can be a lot to take on financially, especially if you’re unprepared to do so. Having a will gives your loved ones advanced notice of potential future financial obligations. This can help everyone involved build a plan that ensures your property benefits the family – whether they move in or sell after your death.

Owning a home is a significant milestone, and it’s essential to protect it by having a will to ensure your wishes (and assets) are honored. Don’t wait until it’s too late! Take the necessary steps to create a will and a legacy for your loved ones today. 

Mid-Density – it’s what we need.

We keep growing outward. Looking at housing development around Shelby County, most is happening on borders. While some folks desire land and space, the cost associated with those luxuries is out of reach for many Memphians. That’s why we need to invest in a mix of housing, including more dense housing in the middle of the city. 

What is housing density?

Housing density measures the number of people against the size of the space in which they live. More people living in a smaller area creates more density. Extremely dense housing would be something like a 65-story high-rise in New York City. You have dozens of floors of people living in a building that takes up less than a block of land. Compare that to rural farmland, where you may have one house per several hundred acres.

What is middle-density housing?

If the high-rise in NYC is high density, and the detached farmhouse is low density, then all of the diverse multi-family housing options in between are middle density. Think about units like duplexes, triplexes, townhouses, rowhomes and other multifamily options that aren’t large apartment complexes. These developments allow more family units to dwell on smaller plots of land, which is helpful when building space is limited – like the core of cities like Memphis. So, why is middle housing such an excellent option for cities like ours? Here are a few of the many reasons. 

Density places people in closer proximity to resources. 

Because dense housing requires less land, you can use smaller plots of premium land to house multiple family units. And, since you’re not pushing new development into outlying parts of the county, you’re putting people near already established resources like medical facilities, grocery stores, transit lines, government buildings and job opportunities. Depending on the person and the development, walking to get food or go to work may even be possible, reducing the need for transportation and associated costs. 

Density converts unused spaces into viable housing. 

Affordable housing is a critical need in Memphis, as is blight elimination. We can work toward alleviating both challenges by demolishing existing blighted properties and replacing them with middle-density housing. Building high-quality, affordable housing to replace unused properties increases community value two-fold – it improves the overall look, which can impact property value while also adding tax-paying people who will spend money in and around the community.

Density can alleviate the costs of housing and create access for more people.

Generally speaking, when you have more housing units in a space, the cost per unit is less than it would be for a single occupant. Built-in amenities, design choices and other factors can impact prices, but most middle-housing communities would be less expensive than single-family dwellings in and around the same area. While you might immediately consider middle housing as rental units, many middle housing options can be great for first-time homebuyers. Buying a condo, unit in a duplex or other multi-family unit can help people build equity and housing stability. 

Density can build community. 

Density creates proximity to other people, which can build diverse, unique communities. By creating shared spaces where people can gather together, live and work, we’re making a network of neighbors who can look out for and support each other. 

Buying Mortgage Points: What are they and how do they work?

If you’ve considered becoming a homeowner, you might have heard the term, “buying down the interest rate.” That is where mortgage points come in. These points are the fees a borrower pays their lender to trim the interest rate and lower the overall amount of interest they pay over the loan’s term.  

What are points on a mortgage?

Points on a mortgage act as prepaid interest and are due at closing. The amount you pay upfront in mortgage points effectively buys down the interest rate you will pay throughout your loan. One mortgage point typically costs 1 percent of your original loan’s principal. For example, one point on a $100,000 mortgage would cost $1,000.

How do they work?

Mortgage points are a type of prepaid interest. By buying points, you can reduce the interest rate on your loan, and ultimately, lower your monthly payment on your mortgage.

There are two kinds of mortgage points – origination points and discount points.

• Origination points represent the fees that borrowers pay to lenders or loan officers for evaluating, processing and approving mortgage loans. These points are not tax-deductible and do not lower your interest rate.

• Discount points are prepaid interest. The purchase of each point generally lowers the interest rate on your mortgage by up to 0.25%. Most lenders provide the opportunity to purchase anywhere from a fraction of a point to three discount points. 

Should you invest in them?

Buying mortgage points may make sense if you want to stay in your home for a long time. If you keep the same mortgage for the long haul, mortgage points can reduce the overall cost of the loan and keep more money in your pocket as you pay a lower monthly mortgage. If you plan to stay for only a few years, it might be best to purchase fewer points or none at all.

United Housing is looking for ways to help people buy points.

Interest rates are higher now than they have been for more than a decade. That means that the cost to buy a home is expensive – and fewer people can afford to make a home purchase. Interest rates are set by forces beyond our control, so we’re looking for creative financial partners and other organizations to help us create point-buying programs that support people who will be priced out of the market without buying down their interest rates. If you want to learn more about our work or have ideas for a partnership, connect with us at info@uhinc.org.

While buying mortgage points makes sense for some, it isn’t financially beneficial for everyone. You’ll need to crunch the numbers to determine whether you can save with discount points.

Shopping for a mortgage

We’re all looking for a deal, so we’re carefully comparing how much items cost at different stores and across product offerings. How you shop for a mortgage is no different than how you might shop for chicken at the grocery store. You need to look at multiple vendors and the options that are available at each, and then decide which is right for you. While that feels natural for common everyday items, many first-time homebuyers are hesitant to shop around for a mortgage.

The benefits of pricing loan products can be enormous in both the short and long term! Consider this example. You approach three banks asking for estimates on a $175,000 loan with a 30-year term. Check out the difference:

• Bank One offers you a 7.5% interest rate. That means your monthly payment is $1,223.63 and you will pay $265,505.14 in interest over the life of the loan.

• Bank Two offers you a 7% interest rate. With this bank, your monthly payment is $1,164.28 and you’ll pay $244,140.57 in interest over 30 years.

• Bank Three offers you a 6.5% interest rate. Here, your monthly payment is $1,106.12 and your lifetime interest is $223,202.85.

When you adjust the interest rate by even just a percentage point, you could pay $100 more per month and more than $40,000 in added interest over the life of your loan. That difference could send a child to college, buy a car or just help with your monthly grocery budget.

Knowing that the terms of your mortgage could save you money, you now know that you need to shop around before you settle on a financial partner. But how do you get started? We have a few recommendations for you!

Take a homebuyer education course to learn about different mortgage products. While 30-year fixed-rate mortgages are the most common, they are not the only mortgage option out there. Through our Homebuyer Education program, you’ll learn about different loan types and how they vary. Your specific financial situation will determine which loan product is right for you. With the knowledge of loan products in your pocket, you can approach potential lenders with more information and confidence.

Collect recommendations from homeowners you know. Trusted sources like family members, friends and REALTOR® partners can provide recommendations for reliable financial partners. When you approach banks, credit unions and community financial institutions with a recommendation, you have an immediate relationship that can make the process smoother. Don’t go blindly with one recommendation, though. As we mentioned earlier, the right mortgage for you depends on your circumstances, so what works for a friend may not work for you!

Look beyond the big banks. When you need milk, you go to the grocery store. When you need a loan, you go to your bank. While that makes sense, it’s not always the best option for your mortgage. While banks offer mortgage loans, they may not have the best rates in your area. Credit unions often have competitive options, and other mortgage-centric financial institutions could be a great choice as well. Even organizations like United Housing have lending options available for homebuyers. Don’t be deterred if one bank comes back with a pricy option – keep looking for other opportunities!

While mortgage shopping may not be as fun as buying a new outfit, taking the time to find the right deal is enormously impactful today and into the future. If this feels overwhelming, we understand! Start with step one and take our Homebuyer Education course to build your mortgage understanding and overall homebuying confidence! We have online, in-person, night and weekend options, so there is a class that will fit your schedule and needs. Once your course is complete, you’ll be on the path toward homeownership in no time.

Things first-time homebuyers often overlook

When you’re doing something new, it’s normal to miss small details that make a big difference in the grand scheme. If that something is trying a new recipe or a DIY project, it’s not a huge deal. But if you’re buying your first home, every nuance can have a tremendous impact on your future. Here are a few things that first-time homebuyers may overlook and how to prepare for them! 

The buyer’s out-of-pocket expenses.

Most people who are starting to look for a home know that you need a downpayment. The value of that downpayment varies depending on the type of loan you take out, but that’s not the only cash you’ll need to close. In your contract with the seller, there are a number of fees the buyer will have to pay – from attorney fees to taxes and escrow funds. How much money you’ll need will vary, and your mortgage provider should be able to work up a good-faith estimate for each property you visit. But knowing how much money you’ll need on closing day can help you narrow your search and find properties that meet your budget. 

The details of a home inspection. 

United Housing always recommends buyers have their future homes inspected. A home inspection can bring a number of issues to light. When you submit an offer with your REALTOR®, talk with them about making the sale contingent upon an inspection. This means that a qualified home expert will walk the property and highlight anything that is not working as it should be. The inspector will provide you with a detailed report that you can use to request repairs to the home seller. They may not agree to the repairs, but if your contract is contingent upon the inspection, you can then pull out of the deal. So, make sure you not only have your future home inspected, but that you use it to make informed decisions before you sign on the dotted line! 

Fees that will increase your mortgage.

The community you choose to live in can change the fees that are added to your mortgage. Some cities, municipalities and counties have different property tax structures – meaning you may pay more or less to live in one community than you would to live in another one. If you’re looking at homes in a neighborhood with an HOA, make sure you know the annual financial commitment. These can vary dramatically depending on the amenities and resources the community provides. All of these seemingly small differences on a monthly basis make a big impact on your annual budget and housing expenses. 

Being aware of these often overlooked aspects can help you make a more informed decision and set you on the path to a successful and fulfilling homebuying experience. If you want to learn more about the process, connect with United Housing, Inc. We offer Homebuyer Education courses, financial coaching, loan assistance programs and more to help set you on the path to homeownership. 

Three credit mistakes and how to avoid them

Taking steps to improve your credit score feels like working on a class assignment without instructions. Where do you find your credit score? What actions improve it? How much should I expect it to change in a month? What about six months?

The truth: building credit is confusing. Some actions that would seemingly show your creditworthiness can hurt your score and vice versa. Here are three common credit-building mistakes to avoid. 

Letting too many companies pull your credit. 

Whenever you inquire about a loan, the potential lender will look at your credit to see if you’re a good candidate for a loan. This process is called pulling credit. It can happen at a lot of places like car dealerships, electronics stores, leasing offices, furniture stores and banks. If too many organizations pull your credit in a short period, it can hurt your credit score.  

When you’re shopping for a big purchase, don’t give a salesperson your information until you’re ready to make a purchase. If you need to have multiple people pull your credit, like if you’re shopping rates for car loans, ask if the lender can do a “soft pull.” This is a less-invasive credit pull that gives limited information but allows a lender to give you an estimate. 

Getting rid of all your debt. 

You would think that one of the best ways to show you’re a reliable borrower is to pay off all of your loans. But not having any outstanding credit can actually hurt your credit score. While you don’t want to carry debt unnecessarily, there are things you can do to have manageable debt that you pay off consistently. Prioritize paying off loans with the highest interest rates. Paying those off first will save you from paying more in interest over time which keeps money in your pocket. From there, consider taking on zero-interest, short-term loans for products that you already need. A great example is appliances. If you need a new fridge, you can often get a loan at 12 to 18 months “same as cash.” This means that you’re paying toward the purchase over time without paying any interest on the loan. The catch is that if you miss a payment, an interest rate will kick in. So make sure you’re only using this option for things you truly need and can afford. 

Reaching your credit limit each month. 

If you pay them off each month, credit cards can be a good way to show that you’re a reliable borrower. When you apply for a credit card, you’ll be given a credit limit or the maximum amount of money you can charge to the card each month. That limit isn’t a goal to reach, but rather a threshold you want to fall below if you’re working on building credit. One of the factors that determines your credit score is revolving utilization, or how much of your available credit you’re using on a regular basis. When you hit your credit limit for several months in a row, your credit score will start to fall. There are two things you can do to change your revolving utilization score. The first is spending less money on your credit card each month to decrease how much of your available credit you’re using. You can also request that your credit card company review your financial information and increase your credit limit. If you’ve recently received a raise or changed jobs, submit that information and you may be able to extend your credit limit. But remember, the goal is still to fall well short of your limit, so if you get a bump, still try to charge well below that limit each month.

If you’re trying to improve your credit, partnering with financial coaches like the team at United Housing can help you understand where you are and build a plan for improvement. Connect with us today to get started. 

Smart home features – what's worth the investment?

In today's rapidly advancing technological landscape, the concept of a smart home has gone from a futuristic dream to an attainable reality. Smart home features are revolutionizing the way we live, bringing convenience, efficiency and a touch of luxury to our daily routines. However, with several options available, it can be overwhelming to decide which smart home investments are truly worth it.

Smart thermostats

Traditional thermostats are becoming obsolete with the emergence of smart thermostats like the Nest Learning Thermostat and Ecobee. These devices adapt to your routine, learning your preferred temperatures and adjusting them automatically. They can also be controlled remotely through smartphone apps, allowing you to save energy and money by adjusting the temperature when you're away from home. While some of the leading brands can be expensive, there are more affordable options hitting the market every day. Check out Amazon to see some options that cost less than $100 and could help you save even more on your utility expenses.

Home security systems

Investing in a smart home security system is a decision you won't regret. Modern systems offer features like real-time video monitoring, motion sensors, doorbell cameras and facial recognition. With the ability to remotely monitor and control your home's security, you can enjoy peace of mind whether you're at work, on vacation or relaxing at home. The best part of smart security systems is that you can manage them. By starting small with one camera and then adding more pieces over time, you can create a security network that both meets your needs and fits your budget. If you’re interested in buying a home security system, check your favorite retailers on Black Friday and Cyber Monday. Oftentimes, they’ll run specials on bundle packages around the holidays.

Smart lighting

Gone are the days of manually flipping switches. Smart lighting systems – like Philips Hue and Lutron Caséta, enable you to control the brightness, color and scheduling of your lights through voice commands or smartphone apps. Not only does this allow for easy customization of ambiance, but it also contributes to energy conservation.

Smart appliances

If budget isn’t a major concern for you, then you may want to dive into the world of smart appliances. From smart refrigerators that can create shopping lists to ovens that can be preheated remotely, smart appliances are changing the way we interact with our kitchen. These appliances offer convenience, energy efficiency and advanced features that simplify daily tasks.

Smart locks

Have kids who often get locked out or family that comes to visit? Say goodbye to fumbling for your keys with smart locks. These locks can be controlled through your smartphone, allowing you to lock and unlock your doors remotely, provide temporary access to guests, and send alerts when someone enters or exits your home. There are several different levels of smart locks available on the market, meaning there is likely one that is available at your budget level!

Smart smoke and carbon monoxide detectors

Traditional smoke and carbon monoxide detectors are essential, but smart versions take safety a step further. They can send alerts to your phone in case of emergencies, allowing you to take swift action even if you're not at home. This can provide a lot of peace of mind to families who leave their animals at home during the day or who have older children at home for a few hours between school letting out and the end of the workday. Even if you invest in smart detectors, it’s important to still check them regularly and have backup plans in mind.

While the initial investment may seem daunting, the long-term benefits in terms of convenience, energy savings, security and even potential property value increase make it a worthwhile purchase.

As you embark on your smart home journey, remember to assess your needs, prioritize your preferences and gradually build a connected ecosystem that best suits your lifestyle.