As the managing director of a big analytics company, Nicole Hamilton was more than equipped to understand how to refinance her home, but even she found the process confusing.
“I figured if I couldn't understand what the loan officer was telling me, then probably millions of people also had the same issue,” she said.
This realization prompted the self-proclaimed finance expert, math geek, technologist and serial homebuyer to create Homeownering, a company that seeks to help homeowners develop strategies for using their home equity.
“As a home is usually a homeowner's largest purchase in their lifetime and their largest household expense, shaving off costs has a big impact,” Hamilton said. “Also, homeowners have more than half of their net worth in their homes, making it their largest investment.”
Experts predict that as home values rise, more homeowners will look to tap into this resource.
A report released last year by TransUnion estimated that 10 million consumers will take HELOCs between 2018 and 2022 – more than double the number originated from 2012-2016.
Hamilton said it’s important to be aware of strategies that can help you make the most of this asset.
“Home equity can be used for paying for education expenses, home improvements and other things that potentially add value to your earning ability or property value, but if you aren't aware of your home equity, you can't make intelligent tradeoffs,” Hamilton said.
To help, Homeownering offers what Hamilton called bank-grade software in a consumer-friendly way. Users can access a free Home Equity Report, which uses an online calculator to determine a homeowner's equity and show their potential profit if they decided to stay put and continue paying their mortgage for five and 10 years, or if they sold their homes that very day.
It also provides consumers with literature and information that pertains to their specific home equity situation.
In the next six months, Hamilton said the company plans to roll out ARMs and refinancing products that will be presented in a way designed to simplify the process.
“Most of people's financial focus is on retirement plans, investments and savings, but home equity is a much larger portion of our wealth that homeowners don't always have awareness of,” Hamilton said. “If you aren't aware of it, it makes it hard to maximize it and protect it."