Darren Dreifort, the former Major League Baseball pitcher for the Los Angeles Dodgers is ready to part ways with his house in the coveted Pacific Palisades health issues, is married to former sports journalist Krystal Fernandez. The two have been living in the Pacific Palisades abode ever since they got married in 2010, and this is the first time the property is on the market since they purchased it 14 years ago for $3 million, public records show.
Now, the 7,698-square-foot, 3-level home landed on the market with an $8.5 million price tag (Adam Jaret and Ally Jaret with Compass hold the listing) — and we’re here to give you a quick tour of the lovely family home.
Set just a block away from Asilomar Beach and State Park (also known as Monterey Peninsula’s “Refuge by the Sea”), Dreitfort’s house sits on a prime corner lot in El Medio Bluffs — a seaside hamlet that’s often touted as a “bespoke coastal village”.
With 7 bedrooms, 8 bathrooms (7 full and 1 half-bath), the property has 7,698 square feet of living space spread across three floors.
The main floor has an office, a bedroom with an en-suite bathroom, formal living, dining room, family room with fireplace, and a spectacular kitchen with a huge island and generously-sized casual dining banquette — that looks like the perfect gathering place for the whole family.
The top floor features the primary suite and 3 more large bedrooms with en-suite bathrooms, one more inviting than the next.
There’s even more space on the lower level (which has its own separate entrance), where we find 2 more bedroom suites, a kitchen, yoga/ fitness studio, media/ game room and tons of storage.
“Located a half block away from the El Medio bluffs, this 7,700-square-foot California coastal residence boasts an open living space, game room, home theater, gym, and yoga studio, along with an expansive rooftop deck with ocean and mountain views, large backyard, fitness pool and basketball court – perfect for the quintessential Pailsadian family,” listing agent Adam Jaret told us in an email.
Darren Dreifort’s house is located in one of Los Angeles’ priciest and most desirable neighborhoods, Pacific Palisades. Set on the city’s southern bluffs, this affluent neighborhood is known for its beautiful canyons and stunning beaches, its vibrant “downtown” center (The Village), and its proximity to Malibu and Santa Monica.
“The market is still strong for Pacific Palisades, and we anticipate a quick sale due to low inventory and high demand in the neighborhood,” Jaret added.
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If you’re considering buying a house in Georgia, you’re embarking on an exciting journey towards homeownership in one of the most charming states in the U.S. Whether you’re drawn to a condo in Alpharetta, a historic house in Macon, or the scenic beauty of the Blue Ridge Mountains, Georgia offers a diverse range of real estate options to suit every lifestyle. However, for first-time homebuyers and homeowners, the process can be exhilarating and complex, involving crucial steps such as property research, financial preparation, and navigating legal intricacies.
This Redfin guide will shed light on the essential aspects of buying a home in Georgia, providing valuable insights to ensure a smooth homebuying experience in the Peach State.
What’s it like to live in Georgia?
One of the highlights of residing in the Peach State is its pleasant climate, with warm summers and mild winters, making it ideal for outdoor activities year-round. Whether exploring the pristine beaches along the Atlantic coast, hiking through the picturesque North Georgia mountains, or strolling through the charming streets of Savannah with its historic architecture and oak-lined squares, Georgia’s natural beauty never fails to impress. Moreover, the state boasts a rich cultural heritage, evident in its music scene, culinary delights like southern barbecues and peaches, and numerous annual festivals celebrating everything from arts to film and food. Check out this article to learn more about the pros and cons of living in Georgia.
Georgia housing market insights
The Georgia housing market has experienced some notable recent changes in demand and supply. While housing demand experienced a slight decrease this year, the number of available homes has declined by 3.6% year-over-year. Despite this shifting demand, the median sale price has continued its steady ascent, increasing by 1.3% compared to the previous year. The effects of these price increases are particularly evident in cities such as Calhoun, Redan, and LaGrange, which are among the metros with the fastest-growing prices.
Rising mortgage rates have played a significant role in deterring some buyers from entering the market. Nevertheless, several cities in Georgia continue to maintain a competitive edge. North Decatur, Cumming, and Sugar Hill, in particular, have remained at the forefront, holding their positions as the top three competitive cities in the state.
Finding your perfect location in Georgia
Georgia is diverse, offering a wide array of living environments, from bustling urban centers to tranquil rural communities and scenic coastal areas. Each region has a unique charm, amenities, and proximity to various attractions and services. You’ll want to choose the city that aligns with your preferences, such as access to quality schools, proximity to work, recreational opportunities, and cultural activities. Additionally, considering factors like home trends and what neighborhood you’ll live in can significantly impact your long-term investment and satisfaction with your home.
Using tools like a cost of living calculator will aid you on your journey and point you to which cities align with your needs. Here are five of the most popular cities in Georgia to give you a head start.
#1: Columbus, GA
Median home price: $207,000 Columbus, GA homes for sale
Along the scenic Chattahoochee River, Columbus provides residents ample opportunities to enjoy outdoor activities such as kayaking, fishing, and biking along the RiverWalk. The cost of living in Columbus is 9% lower than the national average, making Columbus a great city to check out. The city boasts a vibrant arts scene, with the RiverCenter for the Performing Arts hosting various cultural events and performances throughout the year. Columbus is also home to Fort Benning, one of the largest military installations in the United States.
#2: Augusta, GA
Median home price: $211,950 Augusta, GA homes for sale
Augusta is perhaps best known for hosting the prestigious Masters Tournament, attracting golf enthusiasts worldwide. The city’s picturesque landscapes, including the Savannah River and the Augusta Canal, provide outdoor activities like boating, fishing, and hiking opportunities. Explore some of Augusta’s charming suburbs, where residents can explore historical landmarks such as the Augusta Museum of History. The city’s revitalized downtown area, Augusta’s Broad Street, features a vibrant arts and entertainment scene, with art galleries, theaters, and local eateries showcasing the region’s diverse flavors.
#3: Savannah, GA
Median home price: $333,990 Savannah, GA homes for sale
Moving to Savannah, you’ll be surrounded by well-preserved antebellum architecture and oak-lined streets. The city’s rich cultural heritage is celebrated through various festivals, like the Savannah Music Festival and the Savannah Film Festival, adding to its lively arts and entertainment scene. With its proximity to the Atlantic Ocean, residents can indulge in beachside relaxation and water activities at nearby Tybee Island. The cost of living in Savannah is 9% lower than the national average, making Savannah a good place to live. The city’s warm climate makes outdoor exploration a joy, whether strolling through Forsyth Park, visiting the Mercer-Williams House, or taking a riverboat tour along the Savannah River.
#4: Athens, GA
Median home price: $341,000 Athens, GA homes for sale
As the home of the University of Georgia, Athens exudes a vibrant college-town atmosphere, with a dynamic music scene that has earned it the title “The Classic City of the South.” The city’s downtown area is brimming with quirky shops, local eateries, and live music venues, making it a hub for creativity and entertainment. Residents can explore cultural gems like the Georgia Museum of Art and the Georgia Theatre, contributing to the city’s rich cultural landscape. Athens’ lush green spaces, such as the State Botanical Garden and Sandy Creek Park, allow outdoor enthusiasts to enjoy nature and recreational activities. The cost of living in Athens is 7% lower than in Atlanta, and if this city interests you, check out some of the best Athens suburbs to consider living in.
#5: Atlanta, GA
Median home price: $439,200 Atlanta, GA homes for sale
As Georgia’s bustling cultural and economic capital, moving to Atlanta boasts a thriving arts scene, with renowned institutions like the High Museum of Art and the Atlanta Symphony Orchestra. The city’s culinary landscape is equally diverse, featuring restaurants offering global cuisines and Southern delights. Atlanta’s rich history is evident in its iconic landmarks, such as the Martin Luther King Jr. National Historic Site and the Atlanta History Center. Additionally, if you’re looking for affordable Atlanta suburbs, there are several options for a more budget-friendly location.
The homebuying process in Georgia
After finding your ideal neighborhood, you’re ready to jump into the homebuying process.
1. Prioritize your finances
Before embarking on this significant investment, assessing your financial health, understanding your budget, and determining how much you can afford is essential. This involves reviewing and increasing your credit score, as it greatly impacts your eligibility for a mortgage and the interest rates you may qualify for. Preparing the necessary documents, such as bank statements, tax returns, and pay stubs, streamlines the mortgage application process and increases your credibility as a serious buyer.
There are various programs available for first-time homebuyers in Georgia, including the Georgia Dream Homeownership Program – CHOICE, which can assist with up to $7,500 in down payment assistance.
2. Get pre-approved from a lender
Getting pre-approved from a lender is crucial when buying a house in Georgia, as it offers several significant advantages. Pre-approval involves a thorough evaluation of your financial situation by a lender, which clearly explains how much you can borrow and what type of mortgage you qualify for. Armed with this information, you can confidently search for homes within your budget, saving time and avoiding the disappointment of falling in love with a property that may be out of reach.
3. Connect with a local agent in Georgia
A local agent possesses invaluable knowledge of the Georgia housing market, including current trends, neighborhood insights, and property values. They can guide you in identifying areas that align with your preferences and budget, providing personalized recommendations tailored to your needs. So whether you need a real estate agent in Savannah or an agent in Atlanta, they’re here to help.
4. Start touring homes
During home tours, pay attention to the house’s interior and exterior features. Look for structural integrity, signs of maintenance or repairs, and the property’s overall condition. Consider the layout and flow of the rooms, ensuring they suit your lifestyle and plans. Assess the natural lighting, storage space, and functionality of essential amenities like the kitchen and bathrooms. Take note of the neighborhood’s proximity to schools, work, shopping centers, and other vital amenities.
5. Make the offer
When making an offer, it is essential to consider the property’s fair market value based on recent comparable sales and the current state of the real estate market in the area. Your real estate agent can provide valuable insights and guidance to help you formulate a competitive and reasonable offer. Once you’ve decided on the offer price, you’ll draft a written purchase agreement outlining the terms and conditions, such as contingencies, closing date, and financing details. This offer is then submitted to the seller or agent, who can accept, reject, or counteroffer.
6. Close on the house
The closing process involves a series of essential tasks, including signing legal documents, settling financial transactions, and disbursing funds. Buyers typically can review and sign various closing documents, including the mortgage agreement, title deed, and other necessary paperwork. Any outstanding fees, such as closing costs and property taxes, are settled during the closing, and the final purchase price is paid.
For more information about each step of the homebuying process, check out Redfin’s First-Time Homebuyer Guide.
Factors to consider when buying a house in Georgia
When buying a house in Georgia, there are several unique factors to consider due to the state’s diverse landscape, climate, and cultural nuances. Here are some unique aspects to keep in mind:
Natural disasters
Georgia experiences weather-related events, including hurricanes, tornadoes, and flooding, particularly in coastal and low-lying areas. Understanding the potential risks of these natural disasters can help you make informed decisions about the location and safety of your chosen property. Being well-informed about these natural disaster risks ensures that you can take necessary precautions and make sound decisions to protect your investment and ensure your family’s safety and well-being in your new home in Georgia.
Historic preservation
When buying a house in Georgia, it’s essential to be aware of the state’s historic preservation laws, especially in areas with rich historical architecture and cultural significance. Georgia takes pride in its historical heritage, and many cities, such as Savannah and Atlanta, have implemented strict preservation regulations to protect historic properties and districts. These laws may restrict alterations, renovations, and demolitions of a historic home to maintain their architectural integrity and historical value. As a potential homebuyer, understanding these preservation laws is crucial, as it may impact your ability to make certain modifications to the property.
Humid subtropical climate
For those considering buying a house in Georgia, it’s essential to be mindful of the state’s humid subtropical climate. Georgia experiences hot and humid summers, often exceeding 90 degrees Fahrenheit and high humidity. Winters are generally mild, but occasional cold snaps can bring freezing temperatures. Additionally, homeowners should consider landscaping choices that can withstand the heat and humidity. Mold and mildew prevention become essential concerns, and proper ventilation and insulation should be prioritized in the home.
Home insurance rates
Coastal regions, such as Savannah, Brunswick, and St. Simons Island, are particularly vulnerable to potential damage from hurricanes and storm surges. As a result, insurance providers often charge higher premiums to cover these risks. Homebuyers in these areas should carefully research and compare home insurance from different providers to find the most suitable coverage that balances protection and affordability. Additionally, homes located in flood zones may require separate flood insurance, adding to the overall insurance costs.
Buying a house in Georgia: Bottom line
Buying a house in Georgia offers potential homeowners a wealth of opportunities and experiences. With its diverse landscapes, vibrant cities, and rich cultural heritage, the state presents a range of choices to suit varying lifestyles and preferences. It’s important to be well-prepared, considering factors like the humid subtropical climate, natural disaster risks, and potentially higher insurance rates. By staying informed and connecting with local experts, buyers can confidently navigate the homebuying journey.
Buying a house in Georgia FAQ
What are the requirements for buying a home in Georgia?
Having a good credit score, typically around 620 or higher for conventional loans, is essential. It’s necessary to demonstrate stable income and employment to prove mortgage repayment capability, with lenders evaluating the debt-to-income ratio for manageable monthly payments. While the down payment requirement varies based on lender and loan type, it remains a crucial component. Additionally, obtaining pre-approval is vital for homebuying in Georgia, as it indicates readiness for securing a loan. To make an informed decision, conducting a property appraisal and home inspection is advisable to assess the property’s value and condition thoroughly.
What is the average down payment on a house in Georgia?
The average down payment on a house in Georgia typically ranges from 3% to 20% of the home’s purchase price. Conventional loans often require a down payment of around 5% to 20%, while government-backed loans like FHA loans may have lower down payment options, sometimes as low as 3.5% for qualified borrowers. It’s essential to consult with a mortgage lender or a real estate professional to determine the most suitable down payment amount based on your financial situation and the specific loan program you may qualify for.
How much does it cost to buy a house in Georgia
The cost of buying a house in Georgia can vary widely depending on various factors, such as the location, size, condition, and property features. The median sale price is $375,500 which is lower than the national median. However, home prices can range from below the median for smaller homes in more affordable areas to several million dollars for larger homes or properties in upscale neighborhoods. Factors like real estate market conditions, interest rates, and demand for housing can also influence home prices. Apart from the purchase price, buyers should also consider additional costs such as closing costs, property taxes, home insurance, and potential homeowner association fees.
The Jefferson Avenue commercial district in Buffalo, New York, is anchored by a supermarket.
There are dozens of other businesses and services along the 12-block corridor — a couple of bank branches, a library, a coffee shop, gas stations, a small plaza with a dollar store and a primary care clinic and a business incubator for entrepreneurs of color.
But Tops Friendly Markets, the only grocery store on Buffalo’s vast East Side, is the center of activity. More than just a place to buy food, pick up medications and use an ATM, the store is a communal gathering space in a predominantly Black neighborhood that, for generations, has been segregated, isolated and disenfranchised from the wealthier — and whiter — parts of the city.
Which explains how it came to be the site of a mass shooting on a spring day in May of last year. On that Saturday, a gunman, who lived 200 miles away in another part of the state, drove to Jefferson Avenue and went into Tops, and in just a few minutes killed 10 people, injured three and inflicted mass trauma across the community.
It is a scenario that has sadly, and repeatedly, played out in other parts of the country that have experienced mass shootings. But this one came with a twist: The gunman’s intention was to kill as many Black people as possible.
To achieve that, he specifically targeted a ZIP code with one of the highest percentages of Black residents in New York state. All 10 who died that day were Black.
“The mere fact that someone can research, ‘Where will the greatest number of Black people be … on a Saturday morning,’ that’s not by chance,” said Franchelle Parker, a community organizer and executive director of Open Buffalo, a nonprofit focused on racial, economic and ecological justice. “That’s not a mistake. It’s a community that’s been deeply segregated for decades.”
The day of the shooting, Parker, who grew up in nearby Niagara Falls, was driving to Tops, where she planned to buy a donut and an unsweetened iced tea before heading into the Open Buffalo office, which is located a block away from Tops. The mother of two had intended to complete the mundane task of cleaning up her desk — “old coffee cups and stuff” — after a busy week.
She saw the news on Twitter and didn’t know if she should keep driving to Jefferson Avenue or turn around and go back home. She eventually picked the latter.
When she showed up the next day, there were thousands of people grieving in the streets. “The only way that I could explain my feeling, it was almost like watching an old war movie when a bomb had gone off and someone’s in, like, shell shock. That’s how it felt,” said Parker, vividly recounting the community’s collective trauma in a meeting room tucked inside of Open Buffalo’s second-story office on Jefferson Avenue.
Almost immediately following the May 14, 2022, massacre, which was the second-deadliest mass shooting in the United States last year, conversations locally and nationally turned to the harsh realities of the East Side and how long-standing factors that affect the daily life of residents — racism, poverty and inequity — made the community an ideal target for a white supremacist.
Now, more than a year after the tragedy, there is growing concern that not enough is being done fast enough to begin to dismantle those factors. And amid those conversations, there are mounting calls for the banking industry — whose historical policies and practices helped cement the racial segregation and disinvestment that ultimately shaped the East Side — to leverage its collective power and influence to band together in an effort to create systemic change.
The ideas about how banks should support the East Side and better embed themselves in the neighborhood vary by people and organizations. But the basic argument is the same: Banks, in their role as financiers and because of the industry’s history of lending discrimination, are obligated to bring forth economic prosperity in disinvested communities like the East Side.
I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.
Chiwuike Owunwanne, corporate responsibility officer at KeyBank
“Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that,” said The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity, a four-year-old enterprise focused on racial, geographic and economic health disparities. “But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.”
To be sure, banks’ ability to reverse the course of the community isn’t guaranteed — and there is no formula to determine how much accountability they should hold to fix deeply entrenched problems like racism. Several Buffalo-area bankers said that while the Tops shooting heightened the urgency to help the East Side, the industry itself cannot be the sole driver of change.
“There are a lot of institutions … that can certainly play a part in reversing the challenges that we see today,” said Chiwuike “Chi-Chi” Owunwanne, a corporate responsibility officer at KeyBank, the second-largest bank by deposits in Buffalo. “I know banks are often looked upon sort of like a panacea, but I don’t particularly see it that way. I think others have a role to play in all of this.”
A long history of segregation
How the East Side — and the Tops store on Jefferson Avenue — became the destination for a racially motivated mass murderer is a story about racism, segregation and disinvestment.
Even as it bears the nickname “the city of good neighbors,” Buffalo has long been one of the most racially segregated cities in the United States. Of the 114,965 residents who live on the East Side, 59% are Black, according to data from the 2021 U.S. Census American Community Survey. The percentage is even higher in the 14208 ZIP code, where the Tops store is located. In that ZIP code, among 11,029 total residents, nearly 76% are Black, the census data shows.
The city’s path toward racial segregation started in the early 20th century when a small number of job-seeking Black Americans migrated north to Buffalo, a former steel and auto manufacturing hub at the far northwestern end of New York state. Initially, they moved into the same neighborhoods as many of the city’s poorer immigrants and lived just east of what is today the city’s downtown district. As the number of Blacks arriving in Buffalo swelled in the 1940s, they were increasingly confronted with various housing challenges, including racist zoning laws and restrictive deed covenants that kept them from buying homes in more affluent white areas.
Black Buffalonians also faced housing discrimination in the form of redlining, the practice of restricting the flow of capital into minority communities. In 1933, as the Great Depression roiled the economy, a temporary federal agency known as the Home Owners’ Loan Corporation used government bonds to buy out and refinance mortgages of properties that were facing or already in foreclosure. The point was to try to stabilize the nation’s real estate market.
As part of its program, HOLC created maps of American cities, including Buffalo, that used a color coding scheme — green, blue, yellow and red — to convey the perceived riskiness of making loans in certain neighborhoods. Green was considered minimally risky; other areas that were largely populated by immigrant, Black or Latino residents were labeled red and thus determined to be “hazardous.”
“The goal was to free up mortgage capital by going to cities and giving banks a way to unload mortgages, so they could turn around and make more mortgage loans,” said Jason Richardson, senior director of research at the National Community Reinvestment Coalition, an association of more than 750 community-based organizations that advocates for fair lending. “It was kind of a radical concept and it has evolved over the decades into our modern mortgage finance system.”
The Federal Housing Administration, which was established as a permanent agency in 1934, used similar methods to map urban areas and labeled neighborhoods from “A” to “D,” with “A” considered to be the most financially stable and “D” considered the least. Neighborhoods that were largely Black, even relatively stable ones, were put in the “D” category.
The result was that banks, which wanted to be able to sell mortgage loans to the FHA, were largely dissuaded from making loans in “risky” areas. And Buffalo’s East Side, where the majority of Blacks were settling, was deemed risky. Unable to get loans, Blacks couldn’t buy homes, start businesses or build equity. At the same time, large industrial factories on the East Side were closing or moving away, limiting job opportunities and contributing to rising poverty levels.
“Today what we’re left with is the residue of this process where we’ve enshrined … a pattern of economic segregation that favors neighborhoods that had fewer Black people in them and generally ignores neighborhoods that had African Americans living in them,” Richardson said.
Case in point: Research by the National Community Reinvestment Coalition shows that three-quarters of neighborhoods that were once redlined are low- to moderate-income neighborhoods today, and two-thirds of them are majority minority communities.
Adding to the division between Blacks and whites in Buffalo was the construction of a highway called the Kensington Expressway. Built during the 1960s, the below-grade, limited-access highway proved to be a speedy way for suburban workers to get to their downtown jobs. But its construction cut off the already-segregated East Side even more from other parts of the city, displacing residents, devaluing houses and destroying neighborhoods and small businesses.
As a result of those factors and more, many Black residents have become “trapped” on the East Side, according to Dr. Henry Louis Taylor Jr., a professor of urban and regional planning at the University at Buffalo. In 1987, Taylor founded the UB Center for Urban Studies, a research, neighborhood planning and community development institute that works on eliminating inequality in cities and metropolitan regions. In September 2021, eight months before the Tops shooting, the Center for Urban Studies published a report that compared the state of Black Buffalo in 1990 to present-day conditions. The conclusion: Nothing had changed for Blacks over 31 years.
As of 2019, the Black unemployment rate was 11%, the average household income was $42,000 and about 35% of Blacks had incomes that fell below the poverty line, the report said. It also noted that just 32% of Blacks own their homes and that most Blacks in the area live on the East Side.
“Those figures remain virtually unchanged while the actual, physical conditions that existed inside of the community worsened,” Taylor told American Banker in an interview in his sun-filled office at the center, located on the University at Buffalo’s city campus. “When we looked upstream to see what was causing it, it was clear: It was systemic, structural racism.”
Banks’ moral obligations
As the East Side struggled over the decades with rampant poverty, dilapidated housing, vacant lots and disintegrating infrastructure, banks kept a physical presence in the community, albeit a shrinking one. In mid-2000, there were at least 20 bank branches scattered across the East Side, but by mid-2022, the number had fallen to around 14, according to the Federal Deposit Insurance Corp.’s deposit market share data. The 14 include four new branches that have opened since early 2019 — Northwest Bank, KeyBank, Evans Bank and BankOnBuffalo.
The first two branches, operated by Northwest in Columbus, Ohio, and KeyBank, the banking subsidiary of KeyCorp in Cleveland, were requirements of community benefits agreements negotiated between each bank and the National Community Reinvestment Coalition. In both cases, Northwest and KeyBank agreed to open an office in an underserved community.
Evans Bank opened its first East Side branch in the fall of 2021. The office is located in the basement of an $84 million affordable senior housing building that was financed by Evans, a $2.1 billion-asset community bank headquartered south of Buffalo in Angola, New York.
Banks have been very good at providing charitable contributions to the Black community. They get an ‘A’ for that. But doing the things that banks can do in terms of being a catalyst for revitalization and investment in this community, they have not done that.
The Rev. George Nicholas, an East Side pastor who is also CEO of the Buffalo Center for Health Equity
On the community and economic development front, banks have had varying levels of participation. Buffalo-based M&T Bank, which holds a whopping 64% of all deposits in the Buffalo market and is one of the largest private employers in the region, has made consistent investments in the East Side by supporting Westminster Community Charter School, a kindergarten through eighth-grade school, and the Buffalo Promise Neighborhood, a nonprofit organization focused on improving access to education in the city’s 14215 ZIP code.
Currently, Buffalo Promise Neighborhood operates four schools. In addition to Westminster, it runs Highgate Heights Elementary, also K-8, as well as two academies that serve children ages six weeks through pre-kindergarten. Twelve M&T employees are dedicated to the program, according to the Buffalo Promise Neighborhood website. The bank has invested $31.5 million into the program since its 2010 launch, a spokesperson said.
Other banks are making contributions in other ways. In addition to the Jefferson Avenue branch and as part of its community benefits plan, Northwest Bank, a $14.2 billion-asset bank, supports a financial education center through a partnership with Belmont Housing Resources of Western New York. Meanwhile, the $198 billion-asset KeyBank gave $30 million for bridge and construction financing for Northland Workforce Training Center, a $100 million redevelopment project at a former manufacturing complex on the East Side that was partially funded by the state.
BankOnBuffalo’s East Side branch is located inside the center, which offers KeyBank training in advanced manufacturing and clean energy technology careers. A subsidiary of $5.6 billion-asset CNB Financial in Clearfield, Pennsylvania, BankOnBuffalo’s office opened a month after the shooting. The timing was coincidental, but important, said Michael Noah, president of BankOnBuffalo.
“I think it just cemented the point that this is a place we need to be, to be able to be part of these communities and this community specifically, and be able to build this community up,” Noah said.
In terms of public-private collaboration, some banks have been involved in a deeper way. In 2019, New York state, which had already been pouring $1 billion into Buffalo to help revitalize the economy, announced a $65 million economic development fund for the East Side. The initiative is focused on stabilizing neighborhoods, increasing homeownership, redeveloping commercial corridors including Jefferson Avenue, improving historical assets, expanding workforce training and development and supporting small businesses and entrepreneurship.
In conjunction with the funding, a public-private partnership called East Side Avenues was created to provide capital and organizational support to the projects happening along four East Side commercial corridors. Six banks — Charlotte, North Carolina-based Bank of America, the second-largest bank in the nation with $2.5 trillion of assets; M&T, which has $203 billion of assets; KeyBank; Warsaw, New York-based Five Star Bank, which has about $6 billion of assets; Northwest and Evans — are among the 14 private and philanthropic organizations that pledged a combined $8.4 million to pay for five years’ worth of operational support, governance and finance, fundraising and technical assistance to support the nonprofits doing the work.
Laura Quebral, director of the University at Buffalo Regional Institute, which is managing East Side Avenues, said the banks were the first corporations to step up to the request for help, and since then have provided loans and other products and education to keep the program moving.
Their participation “is a signal to the community that banks cared and were invested and were willing to collaborate around something,” Quebral said. “Being at the table was so meaningful.”
Richard Hamister is Northwest’s New York regional president and former co-chair of East Side Avenues. Hamister, who is based in Buffalo, said banks are a “community asset” that have a responsibility to lift up all communities, including those where conditions have arisen that allow it to be a target of racism like the East Side.
“We operate under federal charters, so we have an obligation to the community to not only provide products and services they need but also support when you go through a tragedy like that,” Hamister said. “We also have a moral obligation to try to help when things are broken … and to do what we can. We can’t fix everything, but we’ve got to fix our piece and try to help where we can.”
In the wake of a tragedy
After the massacre, there was a flurry of activity within banks and other organizations, local and out-of-town, to respond to the immediate needs of East Side residents. With the community’s only supermarket closed indefinitely, much of the response centered around food collection and distribution. Three of M&T’s five East Side branches, including the Jefferson Avenue branch across the street from Tops, became food distribution sites for weeks after the shooting. On two consecutive Fridays, Northwest provided around 200 free lunches to the community, using a neighborhood caterer who is also the bank’s customer. And BankOnBuffalo collected employee donations that amounted to more than 20 boxes of toiletries and other items that were distributed to a nonprofit.
At the same time, M&T, KeyBank and other banks began financial donations to organizations that could support the immediate needs of the community. KeyBank provided a van that delivered food and took people to nearby grocery stores. Providence, Rhode Island-based Citizens Financial Group, whose ATM inside Tops was inaccessible during the store’s temporary closure, installed a fee-free ATM near a community center located about a half-mile north of Tops, and later put a permanent ATM inside the center that remains there today. And M&T rolled out a short-term loan program to provide capital to East Side small-business owners.
One of the funds that benefited from banks’ support was the Buffalo Together Community Response Fund, which has raised $6.2 million to address the long-term needs of the East Side.
Bank of America and Evans Bank each donated $100,000 to the fund, whose list of major sponsors includes four other banks — JPMorgan Chase, Citigroup, M&T and KeyBank. Thomas Beauford Jr., a former banker who is co-chair of the response fund, said banks, by and large, directed their resources into organizations where the dollars would have an immediate impact.
“Banks said, ‘Hey, you know … it doesn’t make sense for us to try to build something right now. … We will fund you in the work you’re doing,'” said Beauford, who has been president and CEO of the Buffalo Urban League since the fall of 2020. “I would say banks showed up in a big way.”
Fourteen months later, banks say they are committed to playing a positive role on the East Side. For the second year, KeyBank is sponsoring a farmers’ market on the East Side, an attempt to help fill the food desert in the community. Last fall, BankOnBuffalo launched a mobile “bank on wheels” truck that’s stationed on the East Side every Wednesday. The 34-foot-long truck, which is staffed by two people and includes an ATM and a printer to make debit cards, was in the works before the shooting, and will eventually make four stops per week around the Buffalo area.
Evans has partnered with the city of Buffalo to construct seven market-rate single family homes on vacant lots on the East Side. The relationship with the city is an example of how banks can pair up with other entities to create something meaningful and lasting, more than they might be able to do on their own, said Evans President and CEO David Nasca.
The bank has “picked areas” where it can use its resources to make a difference, Nasca said.
“I don’t think the root causes can be ameliorated” by banks alone, he said. “We can’t just grant money. It has to be within our construct of a financial institution that invests and supports the public-private partnership. … All the oars [need to be] pulling together or this doesn’t work.”
‘Little or no engagement with minorities’
All of these efforts are, of course, welcomed by the community, but there is still criticism that banks haven’t done enough to make up for their past contributions to segregating the city. And perhaps more importantly, some of that criticism centers on banks failing to do their most basic function in society — provide credit.
In 2021, the New York State Department of Financial Services issued a report about redlining in Buffalo. The regulator looked at banks and nonbank lenders and found that loans made to minorities in the Buffalo metro area made up 9.74% of total loans in Buffalo. Overall, Black residents comprise about 33% of Buffalo’s total population of more than 276,000, census data shows.
The department said its investigation showed the lower percentage was not due to “excessive denials of loan applications based on race or ethnicity,” but rather that “these companies had little or no engagement with minorities and generally made scant effort to do so.”
“The unsurprising result of this has been that few minority customers or individuals seeking homes in majority-minority neighborhoods have made loan applications … in the first instance.”
Furthermore, accusations of redlining persist today, even though the practice of discriminating in housing based on race was outlawed by the Fair Housing Act of 1968.
In 2014, Evans was accused of redlining by the New York State Attorney General, which said the community bank was specifically avoiding making mortgage loans on the East Side. The bank, which at the time had $874 million of assets, agreed to pay $825,000 to settle the case, but Nasca maintains that the charges were unfounded. He points to the fact that the bank never had a fair lending or fair housing violation, no specific incidents were ever claimed and that the bank’s Community Reinvestment Act exam never found evidence of discriminatory or illegal credit practices.
The bank has a greater presence on the East Side today, but that’s because it has grown in size, not because it is trying to make up for previous accusations of redlining, he said.
“Ten years ago, our involvement [on the East Side] certainly wasn’t what you’re seeing today,” Nasca said. “We were looking to participate more, but we were participating within our means and our reach. As we have grown, we have built more resources to be able to do more.”
Shortly after accusations were made against Evans, Five Star Bank, the banking arm of Financial Institutions in Warsaw, New York, was also accused of redlining by the state Attorney General. Five Star, which has been growing its presence in the Buffalo market for several years, wound up settling the charges for $900,000 and agreeing to open two branches in the city of Rochester.
KeyBank is currently being accused of redlining by the National Community Reinvestment Coalition. In a 2022 report, the group said that KeyBank is engaging in systemic redlining by making very few home purchase loans in certain neighborhoods where the majority of residents are Black. Buffalo is one of several cities where the bank’s mortgage lending “effectively wall[ed] out Black neighborhoods,” especially parts of the East Side, the report said.
KeyBank denied the allegations. In March, the coalition asked regulators to investigate the bank’s mortgage lending practices.
Beyond providing more credit, some community members believe that banks should be playing a larger role in addressing other needs on the East Side. And the list of needs runs the gamut from more grocery stores to safe, affordable housing to infrastructure improvements such as street and sidewalk repairs.
Alexander Wright is founder of the African Heritage Food Co-op, an initiative launched in 2016 to address the dearth of grocery store options on the East Side, where he grew up. Wright said that while banks’ philanthropic efforts are important, banks in general “need to be in a place of remediation” to fix underlying issues that the industry, as a whole, helped create. (After publication of this story, Wright left his job as CEO of the African Heritage Food Co-Op.)
Aside from charitable donations, banks should be finding more ways to work directly with East Side business owners and entrepreneurs, helping them with capital-building support along the way, Wright said. One place to start would be technical assistance by way of bank volunteers.
“Banks are always looking to volunteer. ‘Hey, want to come out and paint a fence? Want to come out and do a garden?'” Wright said. “No. Come out here and help Keshia with bookkeeping. Come out here and do QuickBooks classes for folks. Bring out tax experts. Because these are things that befuddle a lot of small businesses. Who is your marketing person? Bring that person out here. Because those are the things that are going to build the business to self-sufficiency.
“Anything short of the capacity-building … that will allow folks to rise to the occasion and be self-sufficient I think is almost a waste,” Wright added. “We don’t need them to lead the plan. What we need them to do is be in the community and [be] hearing the plan and supporting it.”
Parker, of Open Buffalo, has similar thoughts about the role that banks should play. One day, soon after the massacre, an ATM appeared down the street from Tops, next to the library that sits across the street from Parker’s office. Soon after the ATM was installed, Parker began fielding questions from area residents who were skeptical of the machine and wanted to know if it was legitimate. But Parker didn’t have any information to share with them. “There was no outreach. There was no community engagement. So I’m like, ‘Let me investigate,'” she said. “I think that’s a symptom of how investment is done in Black communities, even though it may be well-intentioned.”
As it turns out, the temporary ATM belonged to JPMorgan Chase. The megabank has had a commercial banking presence in Buffalo for years, but it didn’t operate a retail branch in the region until last year. Today it has four branches in operation and plans to open another two by the end of the year, a spokesperson said.
After the Tops shooting, the governor’s office reached out to Chase asking if the bank could help in some way, the spokesperson said in response to the skepticism. The spokesperson said that while the Chase retail brand is new to the Buffalo region, the company has been active in the market for decades by way of commercial banking, private banking, credit card lending, home lending and other businesses.
In addition to the ATM, the bank provided funding to local organizations including FeedMore Western New York, which distributes food throughout the region.
“We are committed to continuing our support for Buffalo and helping the community increase access to opportunities that build wealth and economic empowerment,” the spokesperson said in an email.
In the year since the massacre, there has been some progress by banks in terms of their interest in listening to the East Side community and learning about its needs, said Nicholas. But he hasn’t felt an air of urgency from the banking community to tackle the issues right now.
“I do experience banks being a little more open to figuring out what their role is, but it’s slow. It’s slow,” said Nicholas. The senior pastor of the Lincoln Memorial United Methodist Church, located about a mile north from Tops, Nicholas is part of a 13-member local advisory committee for the New York arm of Local Initiatives Support Coalition, or LISC. The group is focused on mobilizing resources, including banks, to address affordable housing in Western New York, specifically in the inner city, as well as training minority developers and connecting them to potential investors, Nicholas said.
Of the 13 members, seven are from banks — one each from M&T, Bank of America, BankOnBuffalo, Evans and KeyBank, and two members from Citizens Financial Group. One of the priorities of LISC NY is health equity, and the fact that banks are becoming more engaged in looking at health disparities is promising, Nicholas said. Still, they have more work to do, he said.
“I need them to think more on how to strengthen and build the economy on the East Side and provide leadership around that, not only to provide charitable things, but using sound business and banking and community development principles to say, ‘OK, if we’re going to invest in this community, these are the types of things that need to happen in this community,’ and then encourage their partners and other people they work with … to come fully in on the East Side.”
Some bankers agree with the community activists.
“Putting a branch in is great. Having a bank on wheels is great,” said Noah of BankOnBuffalo. “But if you’re not embedded in the community, listening to the community and trying to improve it, you’re not creating that wealth and creating a better lifestyle for everyone.”
What could make a substantial difference in terms of banks’ impact on the community is a combination of collaboration and leadership, said Taylor. He supports the idea of banks leading the charge on the creation of a comprehensive redevelopment and reinvestment plan for the East Side, and then investing accordingly and collaboratively through their charitable foundations.
“All of them have these foundations,” Taylor said. “You can either spend that money in a strategic and intentional way designed to develop a community for the existing population, or you can spend that money alone in piecemeal, siloed, sectorial fashion that will look good on an annual report, but won’t generate transformational and generational changes inside a community.”
Banks might be incentivized to work together because it could mean two things for them, according to Taylor: First, they’d have an opportunity to spend money in a way that would have maximum impact on the East Side, and second, if done right, the city and the banks could become a model of the way to create high levels of diversity, equity and inclusion in an urban area.
“If you prove how to do that, all that does is open up other markets of consumption all over the country because people want to figure out how to do that same thing,” Taylor said.
Some of that is already happening, at least on a bank-by-bank case, said KeyBank’s Owunwanne. Through the KeyBank Foundation, the company is able to leverage different relationships that connect nonprofits to other entities and corporations that can provide help.
“I see this as an opportunity for us to make not just incremental changes, but monumental changes … as part of a larger group,” Owunwanne said “Again, I say that not to absolve the bank of any responsibility, but just as a larger group.”
Downstairs from Parker’s office, Golden Cup Coffee, a roastery and cafe run by a husband and wife team, and some other Jefferson Avenue businesses are trying to build up a business association for existing and potential Jefferson-area businesses. Parker imagined what the group could accomplish if one of the banks could provide someone on a part-time basis to facilitate conversations, provide administrative support and coordinate marketing efforts.
“In the grand scheme of things, when we’re talking about a multimillion dollar [bank], a part-time employee specifically dedicated to relationship-building and building out coalitions, it sounds like a small thing,” Parker said. “But that’s transformational.”
Here’s an interesting, though not surprising data point from Zillow. It turns out properties located next to Starbucks locations are bigger winners in terms of home price appreciation.
The company found this out by comparing a database of Starbucks locations with its own housing data. They even paid Starbucks corporate a visit to get the skinny, or perhaps venti, on how it selects its lucrative locations.
Specifically, Zillow analyzed historical home price appreciation in areas located within a quarter of a mile of a Starbucks coffee shop.
What they discovered was that homes that are now near a Starbucks would have sold for $137,000 back in 1997, while those not near a Starbucks would have only sold for $102,000, on average.
Okay, so homes not near a Starbucks actually started out considerably cheaper. But wait, what happened since then.
Well, the homes located next to Starbucks appreciated 96% to $269,000, while the Starbucks-neglected homes only increased 65% to $168,000. So it sounds like the rich got richer.
Find a Home Near Starbucks, or at Minimum a Dunkin’ Donuts
Homes located next to Starbucks (within a 1/4 mile) fetch a premium
Compared to those without a local Starbucks
Prices have risen substantially higher for the Starbucks-adjacent homes
And even the homes near Dunkin’ Donuts locations
Zillow also debunked the idea that it could just be a coffeehouse nearby that’s driving property values higher.
They did so by looking at homes next to Starbucks vs. homes next to a Dunkin’ Donuts location.
Both actually saw stronger appreciation than the norm, but Starbucks homes increased 96%, while Dunkin’ homes only moved 80% higher since 1997.
Overall, all properties in the U.S. increased just 65% from 1997 to 2013.
Homes next to a Starbucks location also recovered faster than other homes, perhaps a testament to the all-knowing location team at Starbucks corporate.
Apparently about 20 analytics experts oversee their location selection process, assessing things like area traffic patterns and existing businesses to determine if a potential site will be a winner.
And while they’ve certainly had some duds, they seem to be on point a lot more than they aren’t, as the data reveals.
So if you’re unsure about a certain area, check to see if a Starbucks is nearby. And by nearby, I mean really close because let’s face it; you’re never that far away from a Starbucks…
Street Names Also Matter
Apparently the name of your street
Can also dictate the value of your property
With lettered street names better than numbered street names
And suffixes like Lane better than Street
Zillow also claims that street names matter when it comes to property value.
They came away with three main data points. One, that names tend to be better than numbers. So it’s perhaps better to live on Main St. than it is 1st St.
Street suffixes also matter. Supposedly it’s better to live on a lane rather than a street, as inconsequential as that may sound. Perhaps lane is more associated with a quaint neighborhood, while street might be akin to an older, urban area.
Lastly, they claim that you should look for a home on a uniquely named street. Apparently homes on Main St. are worth the least, while homes on streets named “Lake” and “Sunset” are worth the most.
Kind of makes sense if you think about it, as silly as it might be. Now you probably shouldn’t make a home purchase decision based on whether there’s a Starbucks around, or just because the street name sounds cool.
But these little details could provide clues about the neighborhood and its potential for growth and real estate investment.
If you scan the headlines from time to time, it won’t take long to notice that a slew of celebrities have been caught up in legal troubles lately. From famous actors and musicians to reality stars, high-profile individuals often make headlines for getting on the wrong side of the law—even when their alleged crimes aren’t what you might expect. To glimpse how tough times can hit anyone—even those in the limelight who appear perfect to us— look at this shocking list of celebrities we bet you didn’t know had been accused of these crimes!
1. Vince Neil of Motley Crue
One user posted, “Vince Neil of Motley Crue killed his friend and crippled two others in a drunk driving accident and served 15 days in prison for it. It had no impact on his career.”
Another commenter replied, “He is probably the most selfish person I’ve ever seen. His autobiography makes you hate him more. That’s quite an accomplishment!”
One Redditor added, “If you hate him for that, listen to him sing live now, and you will hate him even more.”
2. Caitlyn Jenner
“Caitlyn Jenner [seems to have] committed vehicular manslaughter and walked away,” shared one user.
Another replied, “BUCKLE UP, BUCKAROOS!”
One commenter responded, “Ricky Gervais made a joke about this like the Emmys or something. Said how brave Caitlyn was, did a lot for women and trans rights, Yada Yada… then sheepishly says ‘Didn’t do a lot for women drivers though.’“
3. Stephen Collins
One Redditor shared, “That dude who plays the dad on 7th Heaven.”
Another user exclaimed, “Stephen Collins.”
One commenter added, “A family friend’s daughter went to a very pricey rehab. Stephen Collins’ daughter was also there and shared her own story of… abuse by her father. This is not something that I, nor they, would have shared due to the agreement of anonymity, except it has now become public knowledge. Truly appalling, unfathomable terror, pain, and heartbreak this man has caused to the people around him.”
4. Katie Price
One user posted, “Katie Price, AKA Jordan. She harassed and threatened her ex’s new partner while on a restraining order. She was driving [with a] disqualification for speeding, drunk driving, etc. Threatened with jail multiple times. Finally caught driving without license insurance and crashing the car high on drugs. Free.”
Another Redditor added, “There’s a huge petition right now to ban her from keeping animals because of how many animals have died in her care too. Mainly dogs she lets roam freely. One died again last few weeks after being hit by a car.”
5. OJ Simpson
“OJ Simpson nearly decapitated his ex-wife and brutally murdered a bystander. People still gather around him to take selfies at football games,” commented one user.
Another user responded, “I hope those waiters were watching their backs.”
One commenter added, “If I’m his server, he’s eating with spoons.”
6. Chris Brown
An online user posted, “Chris Brown.”
One user commented, “My mom went on a cruise that he was on, and people ignored him, and he was booed constantly. I liked that story.”
One Redditor explained and shared, “Brown was driving a vehicle with Robyn F. as the front passenger on an unknown street in Los Angeles. Robyn F. picked up Brown’s cellular phone and observed a three-page text message from a woman who Brown had a previous sexual relationship with.
“‘A verbal argument ensued, and Brown pulled the vehicle over on an unknown street, reached over to Robyn F. with his right hand, opened the car door, and attempted to force her out. Brown could not force Robyn F. out of the vehicle because she wore a seat belt. When he could not force her to exit, he took his right hand and [began to hit and punch her, causing multiple bruises and bloodshed.]
“Brown resumed punching Robyn F., and she interlocked her fingers behind her head and brought her elbows forward to protect her face. She then bent over at the waist, placing her elbows and face near her lap in [an] attempt to protect her face and head…
“Brown continued to punch Robyn F. on her left arm and hand, causing her to suffer a contusion on her left triceps (sic)… and… on her left hand.
“Robyn F. began screaming for help, and Brown exited the vehicle and walked away. A resident in the neighborhood heard Robyn F.’s plea for help and called 911, causing a police response. An investigation was conducted, and Robyn F. was issued a Domestic Violence Emergency Protective Order.’
“At the end of his statement, Andrews said Brown sent a text message nine days later apologizing. In the text message, Brown apologized for what he had done to Robyn F. and advised [Rihanna’s assistant] Ford that he was going to get help.”
7. Ted Kennedy
“Ted Kennedy—kinda of a celebrity, famous family, name, and politician,” one user posted.
Another user commented, “I used to fish on Chappy. That bridge he drove off has no side rails. It is a flat wood plank bridge and narrow. You don’t have to be drunk to drive off it. Teddy was plastered tho. Common on the Vineyard and in Edgartown for everyone. That bridge goes to basically a dead end. He drove the wrong way—suspicious.
“He pulls himself out of the water and walks miles to the ferry (literally a 60-second trip from dock to dock in Edgartown. Too late. He has to swim across. He walks home. Go to sleep.
“LEO inspects the car and finds the body of Mary Jo. Teddy isn’t charged or really even bothered by LEO at all about it.”
8. Roman Polanski
One Redditor shared, “Roman Polanski. Sure, he’ll be prosecuted if he ever returns to the US, but he’s been living a nice life in France for decades & occasionally still releases a movie. His reputation took a hit, but otherwise, his life seems pretty great.”
9. Karl Malone
“Karl Malone, an all-time NBA center who is still celebrated and revered to this day, impregnated a 13-year-old girl when he was 20 and a sophomore in college. The family settled out of court, but [an assault] of this magnitude seems like one of those crimes that shouldn’t be able to be settled out of court,” one user commented.
10. Pete Townshend
One user posted, “Pete Townshend claiming that he was doing research for his book when caught trying to subscribe to a child p-rn website.”
Another added, “It’s weird cos Chris Langham (actor in The Thick of It) got caught in the same sting and also claimed it was for research purposes to get into character for a show he was doing. But Langham was completely blacklisted, and Townshend wasn’t.”
Do you agree with the list of actors above? Leave us a comment!
Source: Reddit.
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Virtual is an option for just about everything these days, from doctor’s appointments to school. Many apartment communities have hopped on board this trend with great gusto and are only too happy to show an apartment virtually when needed for prospective residents.
Before the days of Skype, Facetime and such, prospective tenants were left with few options for apartment tours. Either haul over to the apartment community for an in-person tour or sign on the dotted line, sight unseen. Since pictures of units are often misleading, the latter is definitely not an ideal option. Sure, not all tenants wound up disappointed in their rental space, but it’s a safe bet that some weren’t happy come move-in day.
What is a virtual tour of an apartment?
A virtual tour is just that — an apartment tour done virtually by landlords or others in charge. Unlike a live tour or in-person tour, this type uses apps or services like Facetime, Skype, Google Hangouts or Zoom.
A typical rental property also offers a canned video for a prospective tenant to watch online, however, those don’t involve specific units, and instead, focus on the community as a whole. Think of that as more of a “highlight reel,” which shows common areas like the laundry facilities, other amenities and a sample unit. Landlords curate those to show the very best of the community.
Why choose a virtual apartment tour?
The purpose of a virtual apartment tour is to help a prospective tenant lay eyes on the unit and community without actually being there. A video call like this is extra helpful for people who can’t travel to do an in-person showing, but who want to have a good sense of what the community is like before signing a lease. A lot of renters have specific ideas about what they want from a new apartment or rental house, and a virtual tour can help them refine a lengthy list of a few top apartments.
How do you set up a virtual apartment tour?
A few years ago, setting up virtual apartment tours might have been something of a headache, but now it’s ultra easy to view a property. Simply do a Rent. search for the type of apartment that fits your needs. Most apartments have a handy “Schedule Tour” button on their Rent. listing, which serves as a step-by-step guide to getting the appointment set. The blue button is under the property phone number at the top right of the screen when viewing on a computer, or it’s within a white button at the bottom of a phone screen, when looking at it that way.
Common ways to tour apartments
Once you’ve clicked the “Schedule Tour” button, several options will pop up. These can include “Live Video Tour,” “Self-Guided Tour” and “In-Person Tour.” Apartment communities offer some, all or none of these options. Spoiler alert — a self-guided tour, while not terrible, is not the best option for potential renters with lots of questions about the house or apartment. This is why many people choose to take a virtual apartment tour that’s guided by landlords.
Scheduling a virtual tour
If “Live Video Tour” is available, click that option. A calendar should pop up showing the dates and times that virtual tours are available. Select the one that works best for you, fill in your contact information and add the event to your calendar.
How do I prepare for a virtual tour?
Like any other important life decision, it’s important to go into the apartment hunting experience prepared and with both eyes wide open. Once you make the virtual open house appointment, it’s important to prep accordingly. Here are some handy tips to make sure you cover everything.
Develop a list of general areas to “see”
The apartment unit and its floor plan aren’t the only part of the community you’ll want to see. Everything is fair game! Here’s a general list of areas you’ll want to see while on the virtual apartment tour:
Parking situation (deck, lot or street?)
All the amenities (pool, fitness, athletic courts, laundry, doggie run, etc.)
The rental office
Hallways leading to and from the unit in question
Exterior landscaping
Mail pickup and drop-off locations
Garbage disposal areas
The entire floor your prospective unit is on
If any of those are in disrepair it’s a sure bet that the unit itself isn’t properly maintained.
Put together a list of questions for landlords
This one-on-one time with the leasing agent is the ideal opportunity to ask questions, albeit in a virtual environment. Here are some sample questions to work from during virtual tours. A few things might not apply to your situation, but most will.
Tips for virtual tour questions
What are the lease terms?
What fees are you responsible for upon move-in? Are there any monthly fees in addition to rent, like parking costs?
How are rent and other fees paid and when?
Which ones are refundable upon move-out? How do you ensure that this happens?
How much notice must a person give when terminating a lease?
Is any work being done to the unit before move-in, such as carpet cleaning/replacement, painting, appliance repair/replacement, etc.?
What are the pet policies and related fees at the property?
How do tenants request maintenance/repairs for their apartments or building?
How do renters file complaints?
Does the community observe “quiet hours?” How do the landlords enforce them?
What are the policies about painting, nails on the walls and other improvements?
What’s the neighborhood like? How is access to public transportation, and are any businesses within walking distance?
Will the building be repainted or have a new roof installed anytime soon?
Is renters insurance necessary? If so, how much?
Take detailed notes during the tour, as all of this information will start to bleed together if you do multiple virtual tours.
How does a virtual tour work?
At this point, the typical leasing agent has done a lot of these types of tours, so they’ll probably have a process in place. Follow their lead, but don’t hang up from the call without seeing everything or asking all of your questions.
How to do a virtual apartment tour in the unit
At some point, you should explore the entire floor plan of the unit you’re interested in. Start at the base of the building. Move through the hallways and stairwells until you reach the correct floor. You’ll want to know ahead of time if your next-door neighbor plans to leave trash bags or 32 garden gnomes outside their door.
Tour each room
Once at the front door (note the unit number), it’s time to enjoy a full view of the potential new home. Visit all rooms, including bedrooms, kitchen, bathrooms, etc. Note how many windows there are, if the windows are in good repair and how much natural light is coming in at that time of day.
Examine the flooring
Take a close look at the flooring. If it’s carpeted, are there any stains, rips or tears? If so, how will they fix it? Note the other types of floor found in the unit, including laminate hardwoods, tile, etc. They require different cleaning methods.
Look closely at the paint
Next, note the paint in each room. Is it dingy and covered in dings and scuffs? If so, ask if they will repaint. Can you choose the new room color?
Make sure everything’s in working order
In the bathroom and kitchen area, ask the leasing agent to run water from all faucets, so you can gauge how good or bad the water pressure is. Also, make sure all appliances are in working order.
Check out the storage potential
Have the tour guide open up all cabinets and closets in each room, so that you see the storage space. Inquire about additional storage, if needed.
Examine the exterior
Visit the deck or balcony area and note any wood rot, beams that need replacing/painting, the view and so on. Smaller details really make or break an apartment!
Log your concerns
If anything needs repair or replacement in any room, take photos via screenshots and note your concerns. Send them in an email to the leasing agent and find out if they plan to rectify the issues. Once the landlord fixes the issues, ask them to take more photos and keep them on file, if you intend to move forward. A new place doesn’t need perfection but look for clean, fully functional and well maintained.
Virtual tour of the community
Once the prospective apartment has met expectations, it’s time to check out the rest of the rental property. Check off each spot on your list as you “go” there, so that you can see them all. A good property manager is only too happy to walk a wannabe tenant around.
Questions to ask about the community
This is a great time to ask general questions about the community. When does the pool open and close for the season? What hours are the fitness center and laundry facilities operational? When is trash day? That sort of thing.
Make note of anything that looks broken or dingy. Find out when the landlord scheduled any needed repairs. Don’t be afraid to ask property managers to zoom in on certain areas. Many apartments will have some areas that need work, but too much disarray is a warning sign.
Virtual tours are a great starting point
If at all possible, schedule in-person showings once you’ve landed on a few top rental properties. It’s always better to lay eyes directly on an apartment before renting than to rely on the camera work of a person you don’t really know. If you’re not local to the area, ask a trusted friend who is to tour on your behalf, then ask their honest opinion about the listing. It might seem like a lot of effort, but renters who do their due diligence are likely far happier in their new homes.
A freelance writer based out of the Atlanta area, Alia has penned articles during her decade+ career for such sites as HowStuffWorks, TLC, Animal Planet, Zillow and many more. Her favorite things to write about include fitness, nutrition, travel, healthcare and general lifestyle topics. A graduate of the University of Georgia, Alia’s an avid Dawg, but she also loves reading, sewing, eating all things chocolate and playing sports with her husband, three boys and beloved border collie, Flash.
Buying a home is an exhilarating and life-changing milestone, and likely a purchase you’ll only complete a few times in your lifetime. Before you start on such a momentous journey, you’ll want to know what to do, when you should do it and what to expect along the way. Here’s a helpful guide about the entire homebuying process, broken into ten simple steps.
Step 1: Check Your Credit and Do Your Research
Although it’s possible to buy a home with cash, most homebuyers do so with the help of a mortgage. There are various types of mortgages available with different interest rates, down payment options, and other terms to consider.
Your FICO score will impact the interest rate and types of loans you qualify for, so getting your credit into great shape is an investment that can bring great returns.
Obtaining your existing credit report is a smart first step in your journey. This will help you to identify any items that need addressing or correcting before you apply for a home loan.
This step is easily done and shouldn’t cost you anything, since the law states you are entitled to one free credit check per year, per reporting agency.
Step 2: Determine Your Budget
Your homebuying budget will be impacted by your household finances and the market you are searching in. Hopefully, you’ll be able to settle on an ideal home price range that gives you both a monthly payment you can afford, and a large number of homes to choose from in your preferred neighborhoods. In order to determine your estimated monthly payment amount, choose a few sample home listings you like, and run them through a customizable loan calculator.
Step 3: Get Pre-Screened for Your New Mortgage
Once you have an idea of what you want within your budget, it’s time to find a lender and get pre-screened for a mortgage to finance your new abode. Getting pre-qualified will ensure that you’re on the right track with your plans and will save you a lot of time and worry. Once you know your financing limit, you won’t fall in love with a home only to realize that you can’t get the loan you need to buy it.
There are several steps involved in becoming pre-screened for a mortgage, but it is a quick and easy process that your lender will guide you through. Getting this first step in the loan process completed before you start looking at homes will ensure that you are ready to make an offer (and have a better chance of succeeding with that offer) when you find your perfect home. Plus, some sellers will only consider offers from buyers who have been pre-screened by a lender for a specific loan amount, so it’s best to set yourself up for success with this easy move.
Some lenders, such as Pennymac, will allow you to lock in your home loan rate at this stage in the process. This can allow you to protect yourself from rising rates while you shop for your new home. Ask a Pennymac Loan Expert about the Lock & Shop program* and how to get started on your mortgage pre-screening.
Step 4: Find the Right Real Estate Agent
The help and guidance provided by a real estate agent or REALTOR® can be priceless, particularly for first-time homebuyers or those searching in an unfamiliar area. From negotiation experience to neighborhood knowledge, the right agent can successfully guide you through one of the biggest purchases you will ever make.
An added bonus is that agents don’t cost the home buyer anything; they’re compensated mainly via a commission from the seller of the home. Despite the value that they can offer, it is not required that homebuyers use a real estate agent, and some buyers do choose to handle the process on their own. But be sure you’ve done your research before opting out of using an agent.
If you need help choosing the right agent, you can be connected with a verified, top-producing agent through Pennymac’s exclusive nationwide agent network, Pennymac Home Connect. You can even earn between $350 and $9,500 at closing should you buy or sell a home with that agent.1
Step 5: Begin Looking at Homes
Now that you’ve done your research and prepared financially, it’s time to start the fun and exciting process of looking at homes.
You will most likely start your house hunting process with a list of must-have features. Once you find several homes that pass the first test, it’s time to evaluate them individually. Here are two categories of deal-breaker (or negotiation-worthy) features to consider while searching.
Some things to consider when you inspect a prospective home:
Plumbing: Run the showers and sinks to observe the water pressure. You’ll also want to look under sinks and appliances for any evidence of leaks. And don’t forget to check the age of the hot water heater.
HVAC: Be sure to get all of the essential questions answered. Such as, how old are the heating and air conditioning units? When was the last time they were serviced? Would you have to add ductwork or remove extensive old systems to install the features you want?
Exterior: What is the age, condition, and composition of the roof, siding, and windows? These are expensive items to replace, and unexpected issues like siding tear-off or the presence of asbestos can make them even more costly.
Electricity: Are there switches and light fixtures where you want them? Fixtures are easy to update, but running new electrical wiring in areas where it doesn’t yet exist can be a much bigger project.
Appliances: Are they included in the home sale? How old are they, and how well do they work? A set of new appliances for a home, even on the low end, can run $3,000 or more.
What to look for around your prospective new home:
The street: Is it noisy? What about on weekends or at rush hour? If you or your guests will need to park on the street, is there enough space available?
Your new neighbors: How do the other homes on the block look? Are they updated and well maintained? Does the neighborhood seem safe and friendly?
The location: How close is the home to your job, schools, shopping, public transportation, and other important places you will need to visit frequently?
Step 6: Make Your Offer
Once you’ve found a house with the location and features you want, it’s time to make an offer. Each home and market are different, but your agent should be able to guide you toward a reasonable offer. Not all offers are accepted on the first go-around — the seller may counter, and you may counter again in return. Once you’ve mutually agreed upon a price, you and the seller will be under contract, also known as being in escrow.
To learn more about escrow accounts, read our article: The Role of Escrow Accounts in Real Estate Transactions.
Step 7: Schedule a Home Inspection (and Other Tests)
The escrow period is a time for you to get more information on your prospective new home, including consulting with various experts. The first thing that most homebuyers do is to schedule a home inspection. During an inspection, nearly all features and systems of your home will be checked and evaluated, with both the homebuyer and seller receiving a report on the home inspector’s findings. The results of these findings can trigger additional negotiations, especially if repairs or updates are needed.
Step 8: Lock In a Rate & Loan Program With Your Lender
Most homebuyers have multiple options to compare when they’re shopping for a mortgage. Whether your priority is a low down payment, a great interest rate, or a particular loan term, your lender should be able to explain the different home loan choices available to you, and how each one impacts your monthly budget and long-term financial goals.
Step 9: Get Your Home Appraised
An important step to protect your investment and obtain appropriate financing is the appraisal. An appraiser uses data from comparable property sales, as well as key features of the home you’re looking to buy in order to come up with a fair current value for your future home.
Because the appraiser is a member of a third-party company (and not directly associated with you, the seller, or the lender), their opinion of your home’s value is accurate and neutral. This ensures that you are not paying too much, and that your lender is not lending you more than a home is actually worth.
Step 10: Nail Your Paperwork and Close the Sale
Once you have fulfilled all of your lender’s documentation requests, it’s time to close escrow on your loan. The actual paperwork that you need to complete and sign will vary based on your loan type and even the location of your home, but closing is typically a straightforward process that your lender, agent, and title company will guide you through. Typically, you will walk out of your closing appointment with the keys to your new home, ready to step into an exciting new chapter of your life.
Get Started on the Path to Your New Home Today
Now that your journey has been broken down into ten simple steps, it’s easy to see that buying a home is a fairly straightforward (as well as fun and exciting) experience. No matter which step you’re currently on, talking to a Pennymac Loan Expert or getting started online can help you succeed on your path to a new home.
*Lock & Shop Program allows consumers pre-approved for a purchase loan with Pennymac to lock a rate prior to locating a property. The program requires a non-refundable fee of $595 due at the time of the rate lock. Consumers pre-approved for a purchase loan with Pennymac must meet appropriate underwriting conditions to obtain a mortgage loan. Consumers may choose between a 60-day, 75-day or 90-day lock period. Consumers must initiate a mortgage loan application for a specific property and be under purchase contract for the property at least 30 days prior to lock expiration in order to extend the locked rate. All rate lock extensions are subject to Pennymac’s standard rate lock extension fees. After the rate lock and subject to favorable market conditions, consumers may be eligible for a one-time reduction in rate once the loan application for a specific property has been initiated (0.50 % maximum reduction in interest rate allowed). Eligible loan products are Conventional Fixed, Conventional ARM, FHA Fixed and VA Fixed. Program excludes Jumbo, refinance, third-party and in-process loans. Program subject to termination in Pennymac’s sole discretion and without notice.
1Pennymac Home Connect is offered in partnership with HomeStory Real Estate Services, a licensed real estate broker. HomeStory Real Estate Services is not affiliated with PennyMac Loan Services, LLC, and PennyMac Loan Services, LLC is not responsible for the program provided by HomeStory Real Estate Services. Obtaining a mortgage from PennyMac Loan Services, LLC is optional and not required to participate in the program offered by HomeStory Real Estate Services. The borrower may arrange for financing with any lender.
Qualifying for the reward requires using a real estate agent that participates in HomeStory’s broker to broker agreement to complete the real estate buy and/or sell transaction. You retain the right to negotiate buyer and or seller representation agreements. Upon successful close of the transaction, the Real Estate Agent pays a referral fee to HomeStory Real Estate Services. All Agents have been independently vetted by HomeStory to meet performance expectations required to participate in the program. If you are currently working with a REALTOR®, please disregard this notice. It is not our intention to solicit the offerings of other REALTORS®. A reward is not available where prohibited by state law, including Alaska, Iowa, Louisiana and Missouri. A reduced agent commission may be available for sellers in lieu of the reward in Mississippi, New Jersey, Oklahoma, and Oregon and should be discussed with the agent upon enrollment. No reward will be available for buyers in Mississippi, Oklahoma, and Oregon. A commission credit may be available for buyers in lieu of the reward in New Jersey and must be discussed with the agent upon enrollment and included in a Buyer Agency Agreement with Rebate Provision. Rewards in Kansas and Tennessee are required to be delivered by gift card.
HomeStory will issue the reward using the payment option you select and will be sent to the client enrolled in the program within 45 days of HomeStory Real Estate Services receipt of settlement statements and any other documentation reasonably required to calculate the applicable reward amount. Real estate agent fees and commissions still apply. Short sale transactions do not qualify for the reward. Depending on state regulations highlighted above, reward amount is based on sale price of the home purchased and/or sold and cannot exceed $9,500 per buy or sell transaction. Employer-sponsored relocations may preclude participation in the reward program offering. PennyMac Loan Services, LLC is not responsible for the reward. The reward is valid for 18 months from the date of enrollment. After 18 months, you must re-enroll to be eligible for a reward. Offer subject to change or cancellation without notice.
PennyMac Loan Services, LLC ( Lender NMLS 35953 ) does not perform any activity that is or could be construed as unlicensed real estate activity, and PennyMac Loan Services, LLC is not licensed as a real estate broker. Agents of PennyMac Loan Services, LLC are not authorized to perform real estate activity.
PennyMac Loan Services, LLC loans subject to credit approval. Offer subject to change or cancellation without notice.
The trademarks, logos and names of other companies, products and services are the property of their respective owners.
Right off the shore of Oahu island, Honolulu‘s skyline rises along the water. From crystal clear beaches to great hiking on Diamond Head and surfing on the North Shore, Hawaii is truly a paradise.
Honolulu is Hawaii’s business and cultural center, as well as the home to the Pearl Harbor naval base. Beyond tourism, Honolulu’s major employers are in the banking and transportation industries.
But, what if you wanted to live there and have access to that every day?
In 2020, Kiplinger found Honolulu one of the top 20 most expensive cities in the U.S. Honolulu’s cost of living is higher than most due to the city and state having to import goods from other places via boat or by plane.
When compared to the national cost of living rate, Honolulu clocks at 92.7 percent higher than the national average. That’s five percent higher than in 2021.
Still thinking of making Hawaii’s capital your home? Here’s a glimpse at the cost of living in Honolulu.
Honolulu housing prices
These days, as rent prices continue to skyrocket, housing costs are the first thing you should look for as a prospective resident. Monthly rent cost is one of the main lines of your budget — in theory, you shouldn’t spend more than 30 percent of your income on rent. In Honolulu, housing prices are 220.7 percent above the national average as of 2022.
The average rent in Honolulu for a one-bedroom apartment is $3,085 per month, a 29 percent increase from 2021. A two-bedroom costs $4,890 per month on average, a 188 percent year-over-year increase.
You’ll find the highest one-bedroom rents in Waikiki, home to Honolulu’s nightlife, high-end shopping and surf beach. If you move inland to Palolo, you’ll find more affordable one-bedroom rents at $1,600 per month on average, only four miles from downtown Honolulu.
Average rent prices in cities near Honolulu
If the hustle of downtown Honolulu is not for you, there are options across the island for more affordable housing in quieter neighborhoods. These neighborhoods’ rent prices have remained relatively stable in the past year.
Here are a few examples of the average rent for a one-bedroom apartment in cities near Honolulu:
Home prices in Honolulu
Just like across the mainland U.S., Honolulu is no stranger to a hot housing market and low inventory. After all, an island has only so many options for housing.
The current median home price in Honolulu is $565,000, an increase of nearly 11 percent over the past year. Homes are currently selling for about two percent above the list price, according to Redfin, and go pending in just 32 days with multiple offers.
However, when you look closely at the housing market, the median sale price for a single-family home in Honolulu is $1.3 million, while a condo falls into the $507,500 range.
Honolulu food prices
Living near the ocean has its perks. Honolulu boasts fresh seafood, delicious fruits and vegetables grown locally. Local dining is also influenced by Japanese culture and local Indigenous groups. Poke, spam and pork are the most popular dishes you’ll see.
You’ll find fine dining restaurants in resorts that cater to tourists, as well as food trucks and stands with delicious food for a more casual experience. Dining out for two people averages between $18 and $87.50 per person, depending on the restaurant.
You’ll find local breweries like Hana Koa Brewing Co. and Stewbum & Stonewall Brewing Co. serving cold pints.
For those looking to eat at home, groceries are 52.7 percent above the U.S. average in 2022. While some produce is grown on the island, most basic items come from the mainland U.S. or elsewhere in the world. Grocery food decreased five percent since 2021.
A steak at the grocery store will cost $19.39 and other foods like eggs ($3.97), milk ($4.05), potatoes ($9.17) and bread ($5.07) also are above the national average.
Staying on a budget is difficult in Honolulu, but a good balance between dining out and groceries can help.
Honolulu utility prices
Hawaii’s mild weather helps when it comes to heating or cooling your home. The average temperature in the hottest month in Hawaii is 88 degrees Fahrenheit and the lowest is around 60 degrees Fahrenheit. Nothing a fan and an open window with a sea breeze can’t fix.
This is a good thing since utilities cost 44.6 percent above the national average in Honolulu. While renewable energy is growing on the island, it’s still expensive to power up the city. An average electric bill can cost $318 per month.
Phone bills average around $182.61, on par with most U.S. cities.
Honolulu transportation prices
After rent prices, transportation is the second factor you should take into consideration. Distance to work, friends and family and favorite restaurants can make all the difference, especially as transportation costs get higher.
Transportation costs in Honolulu are 24.2 percent higher than the U.S. average (six percent lower than in 2021). While a car is always more convenient, gasoline prices have increased in the past year to $4.29 a gallon.
Also, when thinking about a car, you have also take maintenance into consideration. Car maintenance like a tire balance costs $61.60, higher than the national average. Parking in Honolulu is expensive, $4.50 per hour on average except for Sundays and holidays.
Luckily, Honolulu offers other methods of transportation, including the bus, scooters and even bicycles. The city has a 60 bike score, with bike lanes throughout. The walking score for Honolulu is 74, depending on the neighborhood.
For public transit, the HOLO bus costs $3 for a single ride, anywhere on Oahu island. You can pick them up at 7-Eleven or any supermarket on the island. A monthly pass is $80 for an adult, while a day pass costs $7.50 per adult.
Of course, taxis and ride-sharing apps are available but are more expensive. Just make sure that you’re near one of these options when looking at apartments in your budget.
Honolulu healthcare prices
Healthcare costs will depend on the individual and whether they have insurance. And even with insurance, costs will differ. Healthcare is 20 percent higher than the national average in Honolulu.
Going to the eye doctor will cost you around $162.96 per visit and the dentist, around $95.60. Prescription drugs cost around $528.75, while over-the-counter meds like ibuprofen average around $13.47.
Honolulu goods and services prices
Your budget should have items for recreation and household things like haircuts and dry-cleaning. Overall, you’ll pay nearly 30 percent more on goods and services in Honolulu than the national average. An average trip to dry cleaning will cost $23.64.
A haircut will set you back $17.36, while a more involved salon visit (think color, treatment, etc) will cost $73.80. It’s pretty high, especially compared with a West Coast metro like Seattle, where a salon visit is around $57.70.
For a night out, you’ll pay $14.58 for a movie, around $10 for a beer pint with pizza costing $14.99. That’s for one person, the costs can definitely add up.
Taxes in Honolulu
Another big factor you’ll have to take into consideration is taxes, both state income tax and sales tax. These taxes can add a significant burden to your budget unexpectedly.
In Honolulu, sales tax is 4.5 percent (4 percent from the state and 0.5 percent from Honolulu county). So, if you made a $1,000 purchase, you’ll pay an additional $45 in sales tax.
Hawaii’s individual income tax ranges from 1.4 percent to 11 percent, according to the Tax Foundation.
How much do I need to earn to live in Hawaii?
According to the U.S. Census Bureau, the average income in Honolulu (according to 2019 figures) is $87,722 per year. The average salary in Honolulu is $69,000/year.
An average one-bedroom in Honolulu goes for $3,150 per month. This means that you’ll spend $37,800 on rent annually.
It’s important to stick to the 30 percent as much as you can in your budget to allow you to have enough left over for groceries, recreation and incidentals. To find out if you can afford the cost of living in Honolulu, check out our free rent calculator.
Living in Honolulu
Honolulu, a paradise in the middle of the Pacific Ocean, can quickly turn you from a tourist to a resident, thanks to its mild weather and beautiful beaches. However, the cost of living in Honolulu is something to consider since island living is a little more expensive than the mainland U.S.
Whether you want to find a quiet neighborhood or live in the middle of Waikiki, there are beautiful homes available for you. Just make sure to check your budget — twice.
Find apartments for rent in Honolulu today!
The Cost of Living Index comes from coli.org.
The rent information included in this summary is based on a calculation of multifamily rental property inventory on Rent. as of August 2022.
Rent prices are for illustrative purposes only. This information does not constitute a pricing guarantee or financial advice related to the rental market.
You’ve spent the past few years being dumb with money. You realize that now. Your credit cards are maxed out, you’re living paycheck-to-paycheck, and you cannot see a way out. You plan to sell some stuff and to take a part-time job, but you’re looking for other ways to ease the burden. If you’re a homeowner, one option to consider is tapping your home equity to consolidate your consumer debts.
Definitions
Just what is home equity anyhow? Home equity is the difference between what your property is worth and what you owe on it. If your home is currently worth $200,000, for example, and your mortgage balance is $150,000, then you have $50,000 of equity.
Under normal circumstances, this equity remains untapped, increasing slowly with time. There are, however, a couple of ways to use home equity for other purposes:
A home equity loan (HEL) is essentially a second mortgage. The homeowner borrows a lump sum from the bank using the equity in their property as collateral. This sort of loan generally has a fixed interest rate and a term of ten to fifteen years.
A home equity line of credit (HELOC) is slightly different. HELOCs are revolving credit accounts, much like department store credit cards. The homeowner can borrow money repeatedly, as long as the HELOC’s credit limit is not exceeded. HELOCs generally have variable interest rates.
Traditionally, home equity loans (and lines of credit) have been used to fund property improvements such as remodels and additions. Over the past decade, however, it has become fashionable to use this money for consumer spending. Or for debt consolidation.
Robbing Peter to Pay Paul
Using home equity to pay off debt is an appealing option. You can obtain a loan with an interest rate in the neighborhood of 8%. Your credit cards probably charge twice that. If you’re paying on multiple credit cards, it’s likely that your combined payments are higher than the single payment on a home equity loan would be. And in most cases, interest paid on a home equity loan is tax deductible, the same as mortgage interest.
However, home equity loans are not a panacea. They don’t eliminate debt — they just shift it from high-interest to low-interest accounts. And if you fail to change the habits that led you into debt in the first place, you will likely accumulate even more debt in the long run. Most importantly, a home equity loan puts your house at risk — credit cards do not.
Despite these drawbacks, debt consolidation can be an excellent way to arrest the downward spiral and to take control of your finances.
My Story
I took out a home equity loan to pay off my credit cards.
In 1998, I had more than $16,000 in credit card debt. I applied for — and was granted — a home equity loan. I used this money to pay off my outstanding debt. I cut up my credit cards. When I was certain that my balances were paid in full, I cancelled the accounts.
I paid faithfully on this loan for five years (it had a ten year term). But when we bought our new home in 2004, the intricacies of the transaction (read: my lack of savings) forced me to fold my previous home loan into a new HELOC: $21,000 at 6%.
For a while, I made the interest-only minimum payments. Time passed. The minimum payments began to rise. I was puzzled until I noticed that my interest rate was also increasing. This was alarming, and it prompted me to attack this debt in earnest. In fact, just this month I mailed the final check to pay off my home equity line of credit.
Tapping home equity allowed me to get rid of high-interest credit cards and begin down the path of smart personal finance. It wasn’t an immediate turn-around — I took out a car loan and a couple of personal loans before realizing the error of my ways — but the change did happen, and this second mortgage was an important piece of the puzzle.
My Advice
After carrying a home equity loan for nearly a decade, I learned some things along the way:
The interest rate on your home equity loan should be lower than the interest on your credit cards. This is likely the case. However, if you have cards with low rates, you’re better off exercising the discipline to pay them down instead of taking out the loan.
I prefer a home equity loan to a home equity line of credit. The latter is more flexible — you can draw on it repeatedly if you need — but the interest rate is higher. Your goal is to reduce your debt burden, not increase it.
Arrange to have the bank pay off the balances on your cards when the loan is funded. If they’re not able to do this, make paying off your credit cards the first thing you do when you receive the money.
Destroy your cards. Burn them. Cut them up. Shred them. I believe it’s important to avoid credit cards completely until your home equity loan has been repaid.
As you receive statements from your credit card companies indicating $0 balances, call to cancel the cards. Many experts warn against closing credit card accounts because it dings your credit score. My credit score dropped some because of it, but I don’t care. I’d rather have a good credit score and not be tempted to new debt than have a great credit score and be piling up the problems.
Live without credit. Yes, you may need to buy a car on credit, but otherwise refuse to take on new debt. Taking on new debt simply defeats the purpose, and puts you in worse shape than before.
If you follow these guidelines, the equity in your home can be a valuable tool to help you escape from consumer debt.
Conclusion
There are some real dangers associated with using home equity (which is debt secured by your property) to pay down credit card debt (which is unsecured debt). If something goes wrong, you could lose your home.
If you do choose to go this route, please make a commitment to avoid credit cards (and other consumer debt) completely until you’ve finished repaying the loan. If you’re able to exercise a little self-discipline, a home equity loan can be an excellent way to put the brakes on bad habits, and a chance to make a fresh start.
While this might sound like another exotic mortgage gone wrong, it’s actually a new program geared toward making the city of Detroit better, not worse.
And somewhat ironically, it is a ridiculously high LTV mortgage with few underwriting requirements that is being utilized to get a downtrodden city back on its feet.
I’m referring to the “Detroit Neighborhood Initiative,” launched today by the Neighborhood Assistance Corporation of America (NACA) and Bank of America.
It’s basically a rehabilitation mortgage, similar to the FHA 203k loan, with a mortgage that exceeds the property value because renovation funding is included.
In order to qualify for the 150% LTV funding, home buyers need to purchase a property through the Detroit Land Bank’s site, Buildingdetroit.org. Otherwise, the LTV is capped at 110%, which is still pretty solid.
NACA’s Best in America Mortgage
The new initiative works with NACA’s existing “Best in America Mortgage,” which doesn’t require a down payment, closing costs, points, fees, or credit score consideration.
There’s also no income limit, despite the program being geared toward those with low-to-moderate income.
And the interest rates are below market; 3.5% on a 30-year fixed and 2.875% on a 15-year fixed.
It probably sounds too good to be true, but they claim to have $13 billion to lend to those interested.
In fact, one lucky couple got a rate of 0.062% on their 30-year fixed mortgage, which since I last checked, is the lowest interest rate known to both woman and man.
I believe the ultra low rates are achieved via buy downs, with one percent of the loan amount reducing the interest rate by .25%.
The program is available in 40 markets throughout the United States, but caps the LTV at 110%.
Detroit Stabilization Program
Assuming borrowers complete the NACA pre-purchase home buyer program, they can qualify for one of these loans at up to 150% LTV if they purchase and renovate a home in Detroit.
They cite an example where a borrower buys a home for $5,000 from Detroit Land Bank and rolls in $55,000 for renovation costs.
Because the home would typically only appraise for $40,000, a LTV of 150% is necessary to get the job done.
This hypothetical borrower would still enjoy a monthly mortgage payment below $400, including taxes and insurance, on a 30-year mortgage, and under $600 on a 15-year fixed.
NACA argues that this would be “significantly less” than a homeowner would pay to rent.
Bank of America will be providing the mortgages in an effort to rebuild Detroit’s classic homes and neighborhoods.
For those interested, there will be a workshop on Saturday April 25th from 9:30 AM until 1 PM at Pure Word Missionary Baptist Church in Detroit, Michigan.
While it sounds like a great idea, it only works if Detroit home prices actually continue to gain in value.
There’s a lot of hope in the hard-hit city, but no guarantee of a revival. If home prices stagnate or fall, homeowners will be holding a mortgage that again may exceed the true value of the property.
Late last year, NACA and BofA also launched the critically acclaimed Wealth Building Home Loan (WBHL), which is a low-priced 15-year fixed that allows for faster home equity building at an affordable price.