Some Americans who are high earners, but not rich yet are opting for non-traditional mortgages.
Interest-only mortgages offer lower monthly payments, at least initially, but can be risky.
They’re best suited for buyers of higher-end property who invest their money elsewhere.
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With home prices and mortgage rates sky high, potential homeowners — even those with deep pockets — are looking for ways to ease the cost burden.
Some Americans who are high earners, but not rich yet, known as HENRYs, are opting for unusual interest-only mortgages that boost affordability, at least in the short-term. These loans allow the borrower to pay just interest and none of the principal for a certain number of years. The loans are generally reserved for more affluent buyers of higher-end property who can afford a sizeable down payment and have sufficient money saved.
There are some attractive benefits of this kind of loan. They offer lower monthly payments at first, which allow borrowers to invest the money they would otherwise spend to pay off their house on other, higher-return investments. They also allow borrowers whose incomes are expected to rise in the future to buy more expensive homes than they otherwise would be able to afford.
There are also higher risks than a conventional mortgage. Borrowers won’t gain equity in their home, beyond the down payment they made. They’re on the hook for potentially higher mortgage payments in the future, and if their home value declines, they could lose the equity they have or the ability to refinance. Some interest-only loans require borrowers to pay off the entirety of the principal once the interest-only period ends.
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When Sam, whose last name is known to Business Insider, and his wife were looking to buy a home in Brooklyn in the spring of 2022, the homes they liked largely exceeded their budget, which was between $2–$2.5 million.
But one day they got an unexpected opportunity. Their neighbors directly across the street from their rental apartment in Carroll Gardens were about to put their three-bedroom brownstone on the market. The house was exactly what they were looking for, except it was priced at $3.1 million. But their neighbors offered to sell it to them before putting it on the market. Without broker’s fees, the home would cost about $2.8 million.
Sam, a self-employed marketing consultant, was initially concerned the house was just too risky and expensive of a purchase. The future of New York City real estate was still somewhat unclear as many who fled the city when the pandemic hit were slow to return.
But when First Republic bank offered him and his wife a 40-year interest-only loan, they sprung for it. They paid a 20% down payment and locked in a low mortgage rate of between 2.6 and 2.7% for the first 10 years of the loan, and a guarantee that their rate would double at that point.
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Their monthly, interest-only mortgage payment is just under $5,000 per month, which is just a few hundred dollars more than they were previously spending on rent.
Eighteen months later, Sam and his wife are still happy with their decision. They can easily afford their payments now, are saving up for the future rate-hike, and Brooklyn real estate is booming. The couple thinks they’ll be in the house for fifteen or twenty years, at which point their kids will be through high school and they might downsize or leave the city.
“These days, it seems like a pretty safe bet that in 10 to 20 years from now, the value will be higher,” he said. “I don’t know if it’s going to skyrocket or be a little bit higher, but we don’t think it’ll go down.”
A deal for ‘sophisticated investors’
Sam and his wife are the target demographic suitable for an interest-only loan. But these mortgages can be very risky if a borrower doesn’t have sufficient funds to handle higher payments down the line, or the property loses value, in which caseborrowers have to be prepared for potentially higher interest rates after the initial stage of their loan is over.
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These loans are a “niche product” that should be reserved for high-end real estate purchases by borrowers who are “sophisticated investors,” said Chen Zhao, the head of economic research at Redfin. Since you’re not building equity in your home under an interest-only mortgage, those who take out these loans should be investing their money in other ways that are likely to give them a better return, Zhao said.
The proliferation of interest-only mortgages could also evenhurt buyers who can’t afford to take advantage of them. Because they allow affluentborrowers to buy more expensive homes, they can help inflate prices in already high-cost markets. Claes Bäckman, a researcher at the Leibniz Institute for Financial Research SAFE in Germany who has studied the introduction of interest-only mortgages in Denmark, says the loan type doesn’t significantly boost affordability or allow more young people to become homeowners.
“I think it will certainly help the buyers who can afford to get one of these, but if they are competing against other buyers who can also get an interest-only mortgage, they might not get much of a benefit in terms of affordability,” Bäckman said.
A history of predatory lending
Interest-only mortgages were much more common, especially for less-affluent borrowers, in the years leading up to the 2008 financial crisis. At the time, many homebuyers were offered risky loans they couldn’t afford, which ultimately led to the subprime mortgage crisis.
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After the financial crisis, the federal government passed regulations on risky mortgages, making interest-only loans much less common. But with home prices soaring and interest rates stubbornly high, buyers are again opting for riskier loans, including interest-only.
Hillary, whose last name is known to Business Insider but requested partial anonymity to protect her husband’s business, and her husband were victims of these predatory lending practices. In 2007, the couple took out an interest-only mortgage to buy a $585,000 home in San Diego. The house was down the street from Hillary’s motherand the couple wanted it to be their forever home, so they splurged. While their real estate agent warned them against taking out such a large, high-interest loan, the bank encouraged them to take on two loans without any down payment — one at 8% and the other at 9% interest.
When the financial crisis hit, Hillary’s husband, a commission-based financial advisor, saw his income plummet. Hillary, a self-employed photographer, also took a hit. Then the couple had a new baby. They were soon forced to take out loans to make their $4,000 monthly mortgage payments. When they asked their bank to modify the terms of the loan, it refused. The couple declared bankruptcy and ultimately sold the house in 2012 for just $365,000.
Looking back now, Hillary thinks she and her now ex-husband were too optimistic about their future income when they bought the house, but that her bank was reckless.
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“They clearly should never have given us a loan,” Hillary said. “But when you’re young and it’s the, quote, perfect home for you, you know, what are you supposed to do?”
She’s concerned that some buyers are now falling into a similar trap of believing they’ll be able to refinance their loans later for a better deal.
In the broader world of real estate, interest-only mortgages could be contributing to another crisis. These days, interest-only mortgages are increasingly popular among commercial real estate buyers. They made up 88% of new commercial mortgage-backed issuances in 2021 — an increase from 51% in 2013, The Wall Street Journal reported based on data from the company Trepp.
And it’s not going well for borrowers. Commercial mortgage defaults are on the rise. With interest rates so high, many office building owners aren’t able to secure new loans they can afford. In May 2023, Fitch Ratings estimated that 35% of pooled securitized commercial mortgages due between April and December of this year would be ineligible for refinancing.
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Consumer protection advocates are are concerned that homebuyers are increasingly opting for non-traditional mortgages that carry higher risks. Some borrowers are attracted to interest-only loans by the lower monthly costs, but aren’t prepared for worst-case scenarios, and to ultimately pay more to own their home.
“It’s a question of, do people understand that this is a product that’s going to be more expensive for them long term, or are they just enticed by the lower monthly payments?” Bäckman said.
The number of subprime-related lawsuits is outpacing those during the Savings and Loans crisis in the early 1990s, according to a press release from Navigant Consulting Inc.
Per the study, subprime mortgage cases filed in 2007 alone equaled half of the 559 Savings and Loan suits over a multi-year period handled by the Resolution Trust Corporation, who oversees the liquidation of insolvent thrifts.
“The S&L crisis has been a high water mark in terms of the litigation fallout of a major financial crisis. The subprime-related cases appear on their way to eclipsing that benchmark,” said Jeff Nielsen, managing director of Navigant Consulting.
The number of filed lawsuits linked to subprime nearly doubled during the second half of 2007, from 97 to 181, with a total of 278 cases for the year.
The cases were made up of borrower class actions (43 percent), securities cases (22 percent), and commercial contract disputes (22 percent), as well as bankruptcy, employment, and others.
Fortune 1000 companies were named in more than half of the cases, and mortgage bankers and correspondents were the most common defendants, involved in about a third of the suits.
“This appears to be just the beginning,” said Nielsen. “We are already observing a steady acceleration of continuing litigation activity into 2008. The course of regulatory investigations, the prospect of government intervention and marketplace variables may affect the volume of filings, but the explosion of cases in 2007 suggests a daunting forecast of what is still to come.”
The group found that roughly half of the suits were filed in courts in either New York or California, focusing on mortgage brokers, lenders, appraisers, title insurance companies, homebuilders, servicers, and more.
Anyone eyeing mortgage rates, which reached above 8% in October, can be excused for longing for the pandemic lows of sub-3% mortgages. But it’s unlikely those rock-bottom rates will return anytime soon, according to Mark Zandi, chief economist at Moody’s Analytics. Instead, the veteran market watcher expects rates to hover at roughly double that level in the near future.
“Everybody should get used to 5.50% to 6%, because that’s where mortgage rates are going to settle in, [in the] long run,” Zandi told CNBCon Monday. Mortgage rates tend to trail the 10-year Treasury yield, which he suspects will hover around 4% to 4.50%; that generally puts mortgage rates at that 5.5% to 6% he’s expecting.
Asked to predict the magic mortgage rate that will have inventory flooding back into the housing market, Zandi said that obviously a 5% rate is better than 6%, but the long-term number will likely be somewhere in between.
In recent weeks, mortgage rates have fallen from their October highs, with the average 30-year fixed rate currently at 7.30%. But in today’s somewhat frozen housing market, that’s barely a start. With a 6% mortgage rate, things start to thaw as would-be buyers and sellers enter the market, but Zandi doesn’t think home sales will get back anywhere near levels seen during the pandemic, before the Federal Reserve began its interest rate hike cycle to lower inflation. Getting closer to that 5% mortgage rate would trigger more activity, he added.
“The other thing that’s got to happen here, obviously, is we do need to see some weakness in house prices,” Zandi added. “If house prices don’t come [down] to any degree, we’re going to have to see even lower mortgage rates to get sales up.”
Some forecasts, like that of Goldman Sachs, suggest home prices will continue to increase next year. So far, prices aren’t letting up; the national S&P Case-Shiller house price index increased 3.9% on an annual basis in September, according to figures released on Tuesday.
Meanwhile, existing home sales are at their slowest pace since 2010, when the housing market was reeling in the aftermath of the Great Financial Crisis. That’s largely because of the so-called lock-in effect, which keeps homeowners with low mortgage rates from selling their homes—constraining both buyers and sellers. New home sales, on the other hand, have outperformed existing home sales because homebuilders can offer incentives, like mortgage rate buydowns. Still, higher mortgage rates are curbing demand even there, with new home sales falling more than expected in October.
“Most of the weakness in sales is on the existing side,” Zandi explained. “Homeowners are much more reluctant to cut prices … Builders are doing what it takes to move those homes.”
There is some relief pushing its way through the housing market, and that’s on the rental side.
“Rents have gone flat to down, particularly at the high end of the market,” he said. “These big multifamily towers are going up in the big urban centers in the Northeast, Chicago, on the West Coast, and that’s putting downward pressure on rent—and, I think, is having some impact on new house prices, and at the high end of single-family housing markets.”
Realtor.com’s October rental report released on Tuesday showed median rent for studios and one- and two-bedrooms across the top 50 metro areas in the U.S. continues to trail its 2022 levels, experiencing a year-over-year decline for the sixth month in a row. As Zandi mentioned, a lot of that has to do with supply. There was a substantial increase in new multifamily construction in 2022, and that resulted in an uptick in new multifamily completions in 2023, “which significantly augmented the rental supply and exerted downward pressure on rental prices” this year, the report found.
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All investments carry some risk, but the difference between speculating and investing is the amount of risk involved. Speculative investments are typically short-term, and far riskier than traditional investing products and strategies, and may involve the risk of total loss.
Investing typically indicates a more long-term approach to making a profit, with an eye toward managing risk.
Defining Investing and Speculation
Speculating often describes scenarios when there’s a high chance the investment will deliver losses, but also when the investment could result in a high profit. High-risk, high-reward investments include commodities, crypto, derivatives, futures, and more.
In contrast, investing generally refers to transactions where an individual has researched an asset, and puts money into it with the hope that prices will rise over time. There are no guarantees, of course, and all types of investing include some form of risk.
Examples of Investments and Speculative Investments
Assets that are thought of as more traditional types of investments include publicly traded stocks, mutual funds, exchange-traded funds (ETFs), bonds (e.g. U.S. Treasury bonds, municipal bonds, high-grade corporate bonds), and real estate.
Even some so-called alternative investments would be considered more long-term and less speculative: e.g., jewelry, art, collectibles.
Assets that are almost always considered speculative are junk bonds, options, futures, cryptocurrency, forex and foreign currencies, and investments in startup companies.
Sometimes it isn’t as simple as saying that all investments in the stock market or in exchange-traded funds or in mutual funds hold the same amount of risk, or are “definitely” classified as investments. Even within certain asset classes, there can be large variations across the speculation spectrum. 💡 Quick Tip: Before opening an investment account, know your investment objectives, time horizon, and risk tolerance. These fundamentals will help keep your strategy on track and with the aim of meeting your goals.
The Traditional Approach to Investing
When it comes to the more traditional approach to investing, individuals typically buy and hold assets in their investment portfolios or retirement accounts, with the aim of seeing reasonable, long-term gains.
Traditional forms of investing focus on the performance of the underlying business or organization, not on the day-to-day or hour-by-hour price movements of an asset.
For this reason, more traditional investors tend to rely on various forms of analysis (e.g. fundamental analysis of stocks) and analytical tools and metrics to gauge the health of a company, asset, or market sector.
Speculation: A High-Risk, High-Reward Game
The difference between speculating and investing can be nuanced and a matter of opinion. (After all, some investors view the stock market as a form of gambling.) But when traders are speculating, they are typically seeking super-high gains in a relatively short period of time: e.g., hours, days, or weeks.
In the case of commodities or futures trading, the time horizon might be longer, but the aim of making a big profit fairly quickly is at the heart of most speculation.
Speculators may also use leverage, a.k.a. margin trading, to boost their buying power and amplify gains where possible (although using leverage can also lead to steep losses).
The Psychology of Investing vs. Speculating
The psychology of a typical investor is quite different from that of a speculative investor, and again revolves around the higher tolerance for risk in pursuit of a potentially bigger reward in a very short time frame.
Long-Term Investing
Speculating
Taking calculated or minimal risks
Willing to take on high-risk endeavors
Pursuit of reasonable gains
Pursuit of abnormally high returns
Willing to invest for the long term
Willing to invest only for the short term
Uses a mix of traditional investments and strategies (e.g. stocks, bonds, funds)
Uses single strategies and alternative investments
Infrequent use of leverage/margin
Frequent use of leverage/margin
Historical Perspectives on Investing and Speculation
The history of investing and speculating has long been entwined. In the earliest days of trading thousands of years ago, most markets were focused on the exchange of tangible commodities like livestock, grain, etc. Wealthy investors might put their money into global voyages or even wars. Thus many early investors could be described as speculators.
But investing in forms of debt as a way to make money was also common, eventually leading to the bond market as we know it today.
The concept of investing in companies and focusing on longer-term gains took hold gradually. As markets became more sophisticated over the centuries, and a wider range of technologies, strategies, and financial products came into use, the division between investing and speculating became more distinct.
Recommended: What Causes a Stock Market Bubble?
Speculation History: Notable Market Bubbles and Crashes
The history of investing is rife with market bubbles, manias, and crashes. While the speculative market around tulip bulbs in 17th-century Holland is well known, as is the Great Financial Crisis here in the U.S. in 2008-09, there have been many similar financial events throughout the world — most of them driven by speculation.
What marks a bubble is a well-established series of stages driven by investor emotions like exuberance (i.e., greed) followed by panic and loss. That’s because many investors tend to be irrational, especially when in pursuit of a quick profit that seems like “a sure thing.”
Some classic examples of financial bubbles that changed the course of history:
• The South Sea Bubble (U.K., 1711 to 1720) — The South Sea company was created in 1711 to help reduce national war debt. The company stock peaked in 1720 and then crashed, taking with it the fortunes of many.
• The Roaring Twenties (U.S., 1924 to 1929) — The 1920s saw a rapid expansion of the U.S. economy, thanks to both corporations’ and consumers’ growing use of credit. Stock market speculation reached a peak in 1929, followed by the infamous crash, and the Great Depression.
• Japanese Bubble Economy (1984 to 1989) — The Japanese economy experienced a historic two-decade period of growth beginning in the 1960s, that was further fueled by financial deregulation and widespread speculation that artificially inflated the worth of many corporations and land values. By late 1989, as the government raised interest rates, the economy fell into a prolonged slowdown that took years to recover from.
• Dot-Com Bubble (1995 to 2002) — Sparked by rapid internet adoption, the dot-com boom saw the rapid growth of tech companies in the late 1990s, when the Nasdaq rose 800%. But by October 2002 it had fallen 78% from that high mark.
Key Differences Between Investing and Speculating
What can be confusing for some investors is that there is an overlap between investing in the traditional sense, and speculative investing in higher risk instruments.
And some types of investing fall into the gray area between the two. For example, options trading, commodities trading, or buying IPO stock are considered high-risk endeavors that should be reserved for more experienced investors. What makes these types of investments more speculative, again, is the shorter time frame and the overall risk level.
Time Horizon: Long-term Goals vs. Quick Gains
As noted above, investors typically take a longer view and invest for a longer time frame; speculators seek quick-turn profits within a shorter period.
That’s because more traditional investors are inclined to seek profits over time, based on the quality of their investments. This strategy at its core is a way of managing risk in order to maximize potential gains.
Speculators are more aggressive: They’re geared toward quick profits, using a single strategy or asset to deliver an outsized gain — with a willingness to accept a much higher risk factor, and the potential for steep losses.
Fundamental Analysis vs. Market Timing
As a result of these two different mindsets, investors and speculators utilize different means of achieving their ends.
Investors focused on more traditional strategies might use tools like fundamental analysis to gauge the worthiness of an investment.
Speculators don’t necessarily base their choices on the quality of a certain asset. They’re more interested in the technical analysis of securities that will help them predict and, ideally, profit from short-term price movements. While buy-and-hold investors focus on time in the market, speculators are looking to time the market. 💡 Quick Tip: How to manage potential risk factors in a self-directed investment account? Doing your research and employing strategies like dollar-cost averaging and diversification may help mitigate financial risk when trading stocks.
Real-World Implications of Investment vs. Speculation
To better understand the respective value and impact of investing vs. speculating, it helps to consider the real-world implications of each strategy.
The Impact of Speculation on Markets
It’s important to remember that speculation occurs in many if not all market sectors. So speculation isn’t bad, nor does it always add to volatility — although in certain circumstances it can.
For example, some point to IPO shares as an example of how speculative investors, who are looking for quick profits, may help fuel the volatility of IPO stock.
Speculation does add liquidity to the markets, though, which facilitates trading. And speculative investors often inject cash into companies that need it, which provides a vital function in the economy.
Strategic Approaches to Investment
Whether an investor chooses a more traditional route or a more speculative one, or a combination of these strategies, comes down to that person’s skill, goals, and ability to tolerate risk.
Diversification and Asset Allocation
For more traditional, longer-term investors, there are two main tools in their toolkit that help manage risk over time.
• Diversification is the practice of investing in more than one asset class, and also diversifying within that asset class. Studies have shown that by diversifying the assets in your portfolio, you may offset a certain amount of investment risk and thereby improve returns.
• Asset allocation is the practice of balancing a portfolio between more aggressive and more conservative holdings, also with the aim of growth while managing risk.
When Does Speculation Make Sense?
Speculation makes sense for a certain type of investor, with a certain level of experience and risk profile. It’s not so much that speculative investing always makes sense in Cases A, B, or C. It’s more about an investor mastering certain speculative strategies to the degree that they feel comfortable with the level of risk they’re taking on.
The Takeaway
One way to differentiate between investment and speculation is through the lens of probability. If an asset is purchased that carries a reasonable probability of profit over time, it’s an investment. If an asset carries a higher likelihood of significant fluctuation and volatility, it is speculation.
A long-term commitment to a broad stock market investment, like an equity-based index fund, is generally considered an investment. Historical data shows us that the likelihood of seeing gains over long periods, like 20 years or more, is high.
Compare that with a trader who purchases a single stock with the expectation that the price will surge that very day (or even that year!) — which is far more difficult to predict and has a much lower probability of success.
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Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement. IPOs offered through SoFi Securities are not a recommendation and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation.
New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For SoFi’s allocation procedures please refer to IPO Allocation Procedures. Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.
*Borrow at 10%. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see SoFi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Inside: Tight on time or money? One of these mini savings challenge printables is perfect for you. With these free printables, you’ll be able to save more money in no time.
The concept of a mini savings challenge is all about making money-saving a fun and engaging process. It breaks down your broader financial goals into manageable, short-term targets that cumulatively will help you reach your long-term objectives.
Around here at Money Bliss, we are known for having the best money saving challenges. While they are super popular on Pinterest and Google, what matters the most to us is that people are actually using them and their lives are changing.
So, if that is what you are looking for, then you are in the right place.
We know that the personal savings rate is dipping into the lowest range since 2007-2008 financial crisis around 3.4%.1 That is alarming because many people are one step away from not being financially stable.
Let’s dig into those mini saving challenges to make an impact in your financial life.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Why is a Savings Challenge Beneficial?
A savings challenge, while enjoyable, serves a more significant purpose. It instills a sense of financial discipline and allows you to visualize tangible results.
By making saving a fun and rewarding game, you’re more likely to stay committed and motivated.
This is why my money saving challenges are so helpful for thousands of my readers.
How this Mini Challenge Works?
Mini savings challenges work on the principle of small, regular savings resulting in significant sums over time.
By following a set rule – such as saving a particular amount every week, or matching a specific spending habit with a savings deposit – these challenges make it easy and fun to grow your savings without feeling overwhelmed.
Popular Mini Savings Challenge to Save Money
I love that I am known as an expert in helping people save money. The reason is simple – I love a good challenge.
If you have the right mindset, then you can save money on your income.
1. $300 Mini Saving Challenge
Many of us dream about having a comfortable savings account, but it’s often easier said than done. However, with the $300 Mini Saving Challenge, you can start building that financial safety net one step at a time. This challenge aims to help you stow away $300 and note slight improvements in your spending habits.
The $300 Mini Saving Challenge works by asking you to save a small amount each day. The goal is to gradually increase the daily savings, making it less burdensome and more achievable to hit your target of $300. This challenge is perfect for beginners who are apprehensive about taking on substantial financial commitments all at once but still want to cultivate good money-saving habits.
Expert Tip: Utilize a savings tracker, whether it’s a traditional paper-and-pencil method or a digital app, to keep track of your progress.
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2. $500 Mini Saving Challenge
Learning how to teach yourself to save is one of the hardest things for my readers to do. So, they love these easy milestone challenges
This $500 mini savings challenge is a simple yet effective strategy to begin accumulating a substantial nest egg. This challenge requires you to systematically set aside a predefined amount each day, week, or month, consistently working toward a $500 goal.
Expert Tip: For the $500 Mini Saving Challenge, set a weekly savings goal and commit to reducing unnecessary expenses to manage and accumulate your targeted amount effectively.
3. 10 Week Saving Challenge
Kick-start your savings journey with an invigorating 10-week savings challenge. This feasible initiative can boost your bank balance and cultivate a savings habit.
As James Clear states in his famous bestselling book, Atomic Habits, it takes 21 days to build a new habit.
The challenge will triple your dedication as you will be setting aside a predetermined sum each week for ten weeks. The amounts could steadily increase to enhance the yielded savings.
Week 1 – Save $10
Week 2 – Save $15
Week 3 – Save $20
Week 4 – Save $25
Week 5 – Save $30
Week 6 – Save $35
Week 7 – Save $40
Week 8 – Save $45
Week 9 – Save $50
Week 10 – Save $55
By the end of your 10-week tenure, you will have amassed a handsome total of $325! This challenge is particularly beneficial for beginners who are striving to enforce a strict savings regimen.
Then, you can move on to our popular 52 week money saving challenge and choose the proper amount for you.
Expert Tip: Use a calendar or a mobile application to track your savings and keep you motivated throughout the challenge.
4. Mini Birthday Fund
Like a little surprise gift to yourself, the Mini Birthday Fund Challenge is for those who want to ensure they have a little extra cash to celebrate their special day in style. This delightful savings plan can be started at any time of the year, but the closer to your birthday, the more urgent the catch-up.
The plan is intuitive. Choose a monthly savings goal—say, $20—and diligently tuck away that amount every week or month until your birthday arrives. Then, voila! You have a mini birthday fund to splurge on a rewarding gift or experience gift for you. My personal favorite is spa time!
This is self-care and financial discipline bundled into one smart package.
Expert Tip: You can modify the amount you need to save and the total you need to save.
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5. The Penny Challenge
The Penny Challenge further simplifies savings. Plus you will be AMAZED at how much you can save with this simple penny challenge.
Every day you will save one more penny than the day before, yes, just one more penny. That will equal $667.95 in a year.
You can collect all the pennies you acquire and store them in a jar. Once your jar fills up or you hit your 365 days, deposit the pennies into your savings account.
Note: Though the denomination is small, you’ll be surprised at how much you can amass over time. Remember that every penny counts!
6. 365-Day Nickel-Saving Challenge
The 365-Day Nickel-Saving Challenge is perfect for those who like a daily commitment. Start on day one with a deposit of $0.05, and each following day, add a nickel to the previous day’s savings.
By day 365, you will deposit $18.25, accumulating a total of $3339.75 for the year. It’s a manageable and rewarding way to save.
7. The Dime Challenge
The Dime Challenge is similar to the Penny Challenge but uses dimes instead. Though the denomination is small, you’ll be surprised at how much you can amass over time.
Each day you will save ten cents or a dime more than the previous day, by the end of the year, you will save $6,679.50.
Day 1 – Save $0.10, Day 2 – Save $0.20, Day 3 – Save $0.30, and continue for 365 days
Collect all your dimes in a jar, and when it fills up, deposit them in your savings.
10X Effect: This challenge can help you save more money, more quickly than the Penny Challenge because dimes are worth ten times as much as pennies.
8. Dollar Savings Challenge
The $1 Savings Challenge is all about setting aside every single $1 bill that comes your way.
This is a great challenge if you use the cash envelope method for budgeting.
Even if you do this for just three months, you can save up to $1,000. It’s simple — every time you find a $1 bill, put it in your savings jar. This method makes saving money entertaining and gratifying.
9. The $5 Challenge
The $5 Challenge is similar to the $1 Challenge, with just a slight increase in the amount. It involves saving every $5 bill you come across.
Once again, better for those who use cash. But, you still can transfer $5 at intermittent increments to a separate online savings account.
The money saved from this challenge depends on how often you use cash and the duration of your challenge. It’s a doable and straightforward approach to savings.
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Simply select one of the high-yield savings products offered by their network of federally insured banks and credit unions to begin your savings journey.
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10. 25 Envelopes Challenge
Another popular choice is the 25 Envelope Challenge which is a simpler version of the 100 Envelope Challenge. You get 25 envelopes, number them from 1-25, and each day, choose an envelope at random and put in an amount equivalent to the envelope number.
By the end of the challenge, you will save $325 in less than a month.
This challenge makes saving money unpredictable and exciting, leading to substantial savings over time. Next, you can try the 50 envelope challenge.
11. The Spare Change Challenge
The Spare Change Challenge involves saving all your loose change in a jar or piggy bank. Once the container fills up, deposit the savings into your bank account.
You’ll be surprised at how quickly the change adds up! However, this challenge works best for those who frequently use cash.
Tip: Don’t be afraid to pick up spare change on the ground!
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12. Round Up Savings Challenge
The Round Up Savings Challenge is best suited for card users. Whenever you make a purchase, round the figure to the nearest dollar and deposit the difference into savings.
For instance, if you spend $17.50, round it up to $18 and save the remaining 50 cents. It may seem small but will accumulate over time.
Go Digital: You can easily do this with the Acorns app.
13. No-Spend Challenge
The No-Spend Challenge encourages participants to avoid spending any extra money beyond the essentials for a set time. This involves taking a “financial fast,” where any non-essential spending is put on hold.
As such, this is one of my personal favorites, especially for those new to budgeting. It really helped me grasp what I truly needed to spend money on and what I didn’t. The same is true for all of my readers. The savings from this challenge can be substantial.
You can tailor the time frame to your own liking — try a no-spend day, week, or even month. Learn more about the no spend challenge.
14. No Eating Out Challenge
A no eating out challenge serves as an excellent tool to realize your spending habits as it eliminates the often overlooked cost of frequently dining out, enabling you to save more than expected. Right now, the average person spends $166 per month with most average costs in the $10-20 range.2
Combating your habit of eating out can lead to considerable savings, hence the No Eating Out Challenge. Under this challenge, you commit to avoiding restaurants, takeaway, and delivery for a set period, typically a month. The money saved from not dining out is then transferred into your savings, leading to substantial amounts over time.
This challenge makes you conscious of your expenditure and allows you to understand the significant amount you can accumulate over a period, promoting better spending habits.
15. The Spending “Swear Jar” or “Bad Habit” Challenge
Implementing a swear jar or a ‘bad habit’ jar can serve multiple purposes effectively. Not only does it stimulate the accumulation of savings, but it also aids in the transformation of replacing a bad habit with a good habit.
The rule is simple – each time you indulge in a specified bad spending habit, like making an unplanned purchase, you deposit a set amount (like a dollar) into your “swear jar.” This challenge effectively boosts savings while reducing unwanted expenses.
This is a great tactic to reduce your variable expenses.
Bonus: Savings Percentage Challenge
Last, but not least, my personal favorite! Increasing your Savings Percentage challenge.
The Savings Percentage Challenge urges you to save a fixed percentage of your income, preferably 20% every month. By adjusting the savings percentage to your comfort level, this challenge provides adaptability and the potential for significant savings over time.
To encourage savings as a regular habit, increase your savings percentage by 1% each year or with any pay raises or expense reductions.
See how the saving percentages work.
Tips for Successful Savings Challenge
Tip #1 – Creating Your Savings Goals
Creating specific, measurable, achievable, relevant, and time-bound (SMART) savings goals is the first step to your savings success. Your goals could be anything, ranging from a weekend getaway to creating an emergency fund.
Having clear savings goals keeps you motivated, providing a sense of purpose and direction. Learn more about smart money goal setting.
Tip #2 – Establishing the Savings Timeline
Once you have your savings goal, establish a realistic timeline to achieve it.
If your goal is to save $1000 and you decide to save $100 per month, your timeline will be 10 months.
If you need to save $300 in 30 days, then you must save $10 a day.
Establishing a clear timeline helps you organize your savings efficiently and remain motivated in your journey.
Tip #3 – Automatic Savings
One area I always stress to my readers is to pay yourself first. This concept is to set money aside first when you get your paycheck.
Then, take it one step further and establish an automatic transfer from your regular account to your special savings fund each pay period or month. This way, you won’t have to remember to make the transfer yourself, and it becomes an out-of-sight, out-of-mind saving habit!
Tip #4 – Staying Motivated through the Challenge
Track your progress visually, say, by coloring a box each time you save is habit-worthy. Keep your progress chart somewhere easily visible. This practice makes tracking fun and keeps you encouraged to save more.
Our free resource library of printables is full of possible money saving challenge ideas!
Staying motivated throughout your savings journey is crucial. Plus, watching your savings grow over time can be incredibly satisfying.
Tip #5 – Adjust your mindset for Improved Savings
Achieving your savings goals is truly a mindset game. Instead of seeing savings as a subtraction from your income, adjust your mindset to view it as paying yourself first.
Moreover, remember not to beat yourself up over occasional slip-ups. Continue to focus on your goal and celebrate small achievements.
Every dollar saved gets you one step closer to your goal.
Extending the Mini Savings Challenge – What’s Next?
Once you have completed a mini savings challenge, take your saving habit to the next level. Assess your financial situation and savings goal to determine new challenges.
You could consider higher-value monetary challenges or extend the challenge’s duration. Remember, consistent saving habits can greatly impact your long-term financial health.
Maintaining consistency in saving money is a golden key to long-term financial health.
Here are our popular money saving challenges:
Regardless of the amount, the habit of regularly putting money aside significantly contributes to building considerable savings. Remember, it’s not always about how much you save, but how consistently you do it.
Consistently saving, even smaller amounts, can lead to substantial totals over time.
Download the Printable Savings Tracker
To make your savings challenge fun and interactive, download one of our free printable savings trackers. These printable trackers will help you visually track your progress, boosting your motivation.
Every time you save money, color in a box or check it off.
Seeing this visual representation of your savings grow is a fun, rewarding way to track your journey toward your financial goal. Once you reach your goal, start again and keep the momentum going.
**To access these free printable, you must subscribe to my newsletter and you will be emailed the password.**
Frequently Asked Questions (FAQs)
Yes, you can start a savings challenge at any time. There is no specified period or date to begin.
You can choose a day that suits you best and kick off your savings challenge. Remember, the important part is not when you start, but that you start – and consistently save.
Staying committed to your savings plan is primarily about discipline and motivation.
Personally, I visualize my financial goals and stay motivated by celebrating small wins. You can do the same thing.
Also, use a savings tracker to make your progress tangible and fun. Finally, involve family or friends in your savings challenge so you can motivate and encourage each other along the way.
Of the Mini Savings Challenges, Which Will You Try First
Embrace the journey of a savings challenge, enjoying the process just as much as the destination.
This is key to becoming financially stable. It’s not only about reaching your financial goal but also about developing lasting habits of financial discipline and stewardship. These mini savings challenges are a learning experience and remember, no matter the size of your savings, every step is a step in the right direction.
With the help of a mini savings challenge tracker, you can start small yet grow big in savings.
These mini challenges, though small-scale and manageable, can lead to a significant increase in your savings over time. More than that, they encourage the much-needed habit of saving regularly.
Get started on your savings journey, make it enjoyable, and watch your money accumulate over time.
Sources
FRED St. Louis Fed Ecomonic Data. “Personal Saving Rate.” https://fred.stlouisfed.org/series/PSAVERT. Accessed November 8, 2023.
US Foods. “The Diner Dispatch: 2023 American Dining Habits.” https://www.usfoods.com/our-services/business-trends/american-dining-out-habits-2023.html. Accessed November 8, 2023.
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The Census Bureau released the monthly New Home Sales report today, showing a decrease from 719k in September (revised down from 759k initially reported) to 679k in October. While this number is below the long term trend that emerged after the Great Financial Crisis, it’s still in league with the pre-covid highs.
The post-covid story for the housing market has been one of ever-dwindling inventory and its various effects. One of the most obvious effects of lower EXISTING home inventory is that NEW homes have captured a larger share of the market.
Existing homes have moved lower, almost exclusively from the peak. The divergence from New Home Sales has been especially notable since mid-2022 when rates really began skyrocketing. The following chart shows the percent change in both new and existing sales from the peak.
Perhaps most notable is the price trend during the time when sales were down more than 40%.
An inventory crunch is the only thing that could explain the juxtaposition of a sharp decline in sales and a sharp increase in values, but it’s important to note the 3rd ingredient in play during the highlighted time frame above: incredibly low rates. Prices stopped accelerating almost as soon as rates began to jump.
What’s the takeaway for the housing market? Today’s report doesn’t tell us much. Anything in the 650-750k range is fairly neutral. Additionally, the outlook may be rapidly changing to whatever extent the highest interest rates are behind us. That’s a possibility that will receive more clarity with next week’s economic data, but it will take several months to confirm.
Mortgage rates have pulled back in recent weeks giving consumers and loan originators some breathing room, but headwinds in the industry are far from over.
The decline in the 10-year Treasury yield and agency mortgage-backed securities (MBS) yields — due to a soft jobs report in late October — led to a slight pick up in seasonally-adjusted mortgage application volume. This marks a “welcome near-term reprieve for originators and many mortgage real estate investment trusts (mREITs),” according to a note from Piper Sandler, a leading investment bank.
“But this move is immaterial relative to the continued downward trend that has persisted throughout the past two years – particularly as we face the seasonally slow winter months,” the note said.
Piper Sandler forecasts further consolidation within the mortgage industry over the next few months with demand near multi-decade lows before picking up in 2024 as consumers re-adjust to higher mortgage rates.
Here are the three factors that Piper Sandler noted for continued mortgage industry headwinds:
Application demand remains low
The Mortgage Bankers Association’s (MBA’s) weekly mortgage application volume index reached the lowest levels in October since tracking the data in 2020. Application volume index declined 19% year over year as of Oct. 25 and decreased 45% below the previous trough in 2018, according to Piper Sandler.
Overall, purchase volume is now down 56% from the near-term peak in January 2021 and 9% below the previous trough in 2014.
Prepayment speeds continue to trend lower
Mortgage prepayment speeds on 30-year fixed rate pools of agency and government mortgages in October dropped 15 to 40 basis points from the previous month to 4.8% for Fannie Mae and Freddie Mac pools, according to Piper Sandler.
The drop in prepayment speeds indicates mortgage servicing rights (MSR) amortization expense should continue to decline, a positive development for mortgage companies with large servicing fee revenue streams.
Piper Sandler expects a drop in prepayment speeds to continue despite the near-term dip in mortgage rates, because very few borrowers have mortgage rates above current levels.
The industry would need to see a more persistent mortgage rate decline to near 6% for a more meaningful pickup in prepayment speeds, the note said.
Affordability remains a problem
Affordability has declined for nine straight months in October as median home prices have increased 8% and mortgage rates have increased 123 bps during this time period.
Piper Sandler estimates the median monthly payment is now $2,313 as of October 2023. That’s a 12% year-over-year increase and a 130% increase from the pre-pandemic levels in October 2019.
The median mortgage payment exceeds 30% of the median household annual income while home prices are 4.2 times the median annual income, Piper Sandler said. This finding is in line with the financial crisis high and well above the 2000-2022 average of 3.4x.
The industry would need to see a more meaningful decline in home prices and/or mortgage rates before home sales will start reverting back to pre-pandemic levels, Piper Sandler projected.
Home sales numbers released Tuesday offered more sobering news: The number of existing homes sold continued their fall to levels last seen during the fallout of the Great Recession. At the same time, prices remain stubbornly high amid the highest mortgage rates in 23 years.
The National Association of Realtors reported that existing-home sales in October dropped below economists projections to 3.79 million. The median price last month ticked up to $391,800 – a 3.4% increase from 2022 but a 6.3% decline from September.
Since 2000, annualized home sales figures averaged about 5.3 million each month. Only three other months – all following the 2007-08 financial crisis – registered lower sales than October, including July 2010 which set the low watermark of 3.45 million.
here to see them.
The number of homes sold has been tumbling since 2022 when the Fed announced its plans to raise interest rates in an effort to tame 40-year high inflation. Mortgage rates have more than doubled since and, in turn, increased monthly payments for new homeowners.
30-year mortgage rates have fallen to 7.44%. Rates, which might have peaked at the end of the month, appeared to deterred some buyers in October, according to the NAR report. All-cash sales rose from 26% last year to 29% in October, while the percentage of first-time buyers, the next biggest group, was unchanged.
Fed Chairman Jerome Powell and other Fed presidents continue to say that we shouldn’t expect a reduction in interest rates any time soon. That said, nearly all investors who bet on the movements of interest rates expect the Fed will hold interest rates steady following its next meetings in December and January, according to the CME FedWatch Tool.
The average 30-year fixed mortgage rate just hit 8% for the first time since 2000, putting housing financing costs at historically high levels.
Given high prices and high interest rates, homebuyers must earn $114,627 to afford a median-priced house in the U.S., according to a recent report by Redfin, a real estate firm, which analyzed median monthly mortgage payments in August 2023 and August 2022.
The firm considers a monthly mortgage payment to be affordable if the homebuyer spends no more than 30% of their income on housing. At the time of the analysis, the average 30-year fixed mortgage was 7.07%.
The median U.S. household income was $75,000 in 2022, Redfin found. While hourly wages in the U.S. grew 5% over the past year, according to the real estate firm, that has not outpaced rising housing costs.
More from Personal Finance: Medicare open enrollment may help you cut health-care costs Before hitting a glass ceiling at work, women face a ‘broken rung’ Sparse inventory drives prices for new, used vehicles higher
Those current market trends have left homeownership out of reach for many people, experts say.
“Housing affordability is incredibly difficult for potential homebuyers,” said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.
How home affordability has changed
In August 2020, the typical monthly mortgage payment was $1,581, based on an average interest rate of 2.94%, Redfin found. At the time, the typical house cost roughly $329,000, and homebuyers would have needed an annual income of $75,000 to afford it.
However, those record-low levels were the result of “highly unusual events, like a pandemic and a nearly catastrophic financial crisis,” said Mark Hamrick, senior economic analyst at Bankrate.com.
Nowadays, the typical U.S. homebuyer’s monthly mortgage payment is $2,866, according to Redfin — an all-time high.
Phiromya Intawongpan | Istock | Getty Images
While the economy and the housing markets move through cycles, it’s unlikely for mortgage rates to decline substantially in the near term, especially as the Federal Reserve is expected to keep the benchmark rate high for longer, added Hamrick.
Additionally, the constrained supply of homes for sale is a “direct result of the lock-in effect,” said Hamrick. The low supply pressures prices upward as current homeowners are less compelled to move or put their houses on the market as they don’t want to trade their low-rate mortgage for one that is significantly higher.
“Higher rates are also increasing the cost and availability of builder development and construction loans, which harms supply and contributes to lower housing affordability,” Alicia Huey, NAHB’s chairman and a homebuilder and developer from Birmingham, Alabama, previously told CNBC.
‘This pain shall pass’
“People should know that this pain shall pass,” said Melissa Cohn, regional vice president of William Raveis Mortgage in New York. “In the next year or two years, interest rates will be lower, and people will have the ability to refinance.”
That said, competition for homes on the market is likely to be worse in a few years as interest rates cool, she said. There are many buyers who remain on the sidelines because of current high rates.
“When interest rates come down, everyone’s going to come back to the marketplace,” said Cohn.
How to decide: Buy now or wait?
The decision of purchasing a home is intensely personal and prospective homebuyers should tread with caution, experts say.
“When deciding to purchase a home, it comes down to personal finances, stability and the length of time they plan on owning,” said Lautz.
In addition to mortgage costs, prospective homebuyers should keep their other financial goals in mind, as well as maintenance costs, said Hamrick. The biggest regret among recent homebuyers was not being prepared for maintenance and other costs, according to a Bankrate survey.
However, “homeownership is the primary means of wealth creation in this country,” said Hamrick.
The typical homeowner has $396,200 in wealth compared to the average renter at $10,400, added Lautz.
First-time homebuyers may consider tapping retirement funds or taking advantage of first-time homebuyer programs that may offer down payment assistance.Buyers can also consider temporary buydowns, which are paid by either the real estate broker or seller, to help lower the monthly payment, said Cohn.
However, it will be important for prospective buyers to work with professionals in the long run, experts say. Buyers should examine all options, consult with realtors about overlook areas and talk with mortgage brokers to consider all the possible loan options, said Lautz.
“This is potentially the most expensive transaction somebody will be associated with in their lifetimes,” said Hamrick. “It should be done as well as possible to the benefit of the buyer.”
Rates for a 30-year, fixed-rate mortgage are the highest in over 20 years and may stay elevated for some time.
As borrowers reel from the sticker shock of conventional mortgages, lenders could see a surge of demand for alternative lending products, such as adjustable-rate mortgages (ARMs), for the first time since the financial crisis.
Most potential borrowers should familiarize themselves with how these products work. Without the proper guidance, they could be enticed by attractive introductory rates only to choose the wrong product for their personal or financial situation in the long term.
One way lenders can create value is to upgrade the shopping experience so borrowers can easily understand, compare and contrast the available products. Here are three tips that can help.
1. Ask the right questions upfront
Most lenders ask borrowers a few initial questions to understand their needs better. But many tend to focus on the basics, like whether a borrower is a first-time homebuyer.
With more products on the table, lenders will need more granular data to steer borrowers toward the right one. In many cases, that product may still be a fixed-rate mortgage. But for some borrowers, a less traditional loan type could make the most financial sense.
What is the best way to help borrowers choose? Start by asking enough questions early on to create a holistic borrower profile. We recommend enhancing your POS flow with an initial questionnaire. Ask these questions:
How long do they plan to stay in their home?
How comfortable are they with uncertainty?
How comfortable are they potentially making higher monthly payments after three, five or seven years?
Of course, the more questions you ask upfront, the more overwhelming the shopping process can feel to borrowers. To ease folks in, we suggest these action items:
Break down your questionnaire into manageable chunks.
Add a progress bar that displays what percent of the questionnaire remains.
Add a “Save and Continue Later” button that gives borrowers more flexibility (and allows you to keep folks engaged).
Add context about why you’re asking for specific information at every stage. Tooltips can be a powerful way to do so; they give borrowers the flexibility to toggle explanations. Tooltips are helpful when it comes to educating customers on your products, which we’ll dive into into next.
2. Educate borrowers early and often
Exotic lending products went mainstream in the early 2000s, leading, in part, to the 2008 financial crisis and the subsequent regulatory overhaul.
It’s worth emphasizing just how little borrowers knew about these products. In the run-up to 2008, many lenders emphasized low introductory mortgage rates and weren’t required to disclose the final terms until closing day. Without enough timely information to ask questions and compare options, borrowers had loans they couldn’t afford.
Today’s regulations require more precise disclosures earlier in the process to help people make more informed financial decisions. But they only apply after a borrower has submitted a loan application, which leaves room for ambiguity when shopping.
When lenders educate up front, they can add value when borrowers need it most. Here’s what we recommend:
Tailor your educational content to the borrower’s profile. Your initial questionnaire can help. For instance, if a borrower says they plan to relocate to Chicago in a few years, they might be a better candidate for a five-year ARM than someone who intends to stay in Charlotte indefinitely. At the comparison stage, you can prioritize education about that product and deprioritize products that might be a poor fit.
Help borrowers understand how rates may change over time. For instance, don’t just display a 3% teaser rate for an ARM. Instead, explain whether it adjusts annually or semiannually, along with the maximum annual adjustment factor and lifetime cap, plus what factors will affect the adjustable rate.
Offer information about refinancing. Many borrowers are familiar with the concept but may need to learn how it works. Spelling out the specifics may make some borrowers feel more comfortable taking on a fixed-rate loan at a 7% or higher rate.
Create an intuitive shopping experience. Avoid the dreaded info dump, where lending products display on an endless scroll with intimidating blocks of text. Instead, let borrowers compare a handful of products side by side. And present only the most important details first, with drop downs or tooltips that offer more information.
Even in a digital-first shopping landscape, loan officers are still a valuable resource for borrowers. Alongside on-screen sidebars and tooltips, ensure that borrowers can connect with a human expert for more hands-on guidance.
The goal is to help borrowers understand the risks and rewards of every product available and feel more confident in their decisions.
3. Invest in the right technology
The key to a top-notch shopping experience is a digital platform that allows for everything we’ve discussed so far — all while fitting seamlessly with the rest of your origination software. Creating that platform, though, is often easier said than done.
For instance, if you choose to build your platform, you’ll have plenty of freedom in its design. But you’ll have to integrate it with your point of sale (POS) on the back end. That could make for a longer and more complex project that eats up more of your organization’s resources.
On the other hand, it might be worth talking with your POS vendor about customizing the shopping experience to fit your goals. This route could help you save on development time.
However, most vendors don’t prioritize software features that seem like “nice to haves.” So you’ll have less control over the features that do get added, not to mention the development timeline. And keep in mind that if your vendor adds new capabilities, any lender — including your competitors — will be able to use them.
There’s no single best path here, but consider partnering with an experienced digital specialist to help you weigh the options available. This way, you can make the right decision for your business and your borrowers.
As “exotic” lending products become more attractive, borrowers will value lenders that demystify the shopping process to connect them with the right product for their needs.
But the truth is that helpful lenders win in any market conditions. By upgrading your shopping experience now, you can set yourself — and your borrowers — up for long-term success, no matter how the wind blows.
Steve Wolfe is an SVP of Banking and Fintech and Lloyd Booth is an Enterprise Solutions Executive at CI&T, a global digital specialist.