Monday, September 30, 2019

When Can I Refinance My Home?


Read how refinancing works and find out how soon you can refinance your mortgage. Learn what to consider when deciding if refinancing is right for you.

When Can I Refinance My Home?

Depending on the situation, it’s possible to refinance a mortgage loan immediately. In some circumstances, however, you may need to wait:

If you want to do a cash-out refinance and gain access to some of the equity you have in the home, the waiting period can be at least six months after your current mortgage loan closed.

If your original loan was modified to make payments more affordable, you might need to wait up to 24 months before you can refinance it.

If you want to refinance an FHA loan with an FHA Streamline Refinance, the waiting period is 210 days.

Even if you can refinance your loan shortly after getting it, there are some things to consider before you do so.

For starters, some mortgage lenders have pre-payment penalties that kick in if you refinance your loan or sell your home within three to five years. Also, getting a mortgage can affect your credit scores, so if you apply for a refinance loan shortly afterward, it could influence your qualification requirements, making it difficult to get a new loan to replace the old one.

Finally, some lenders may require a waiting period between loans, which can limit your options when looking for a loan with the best terms for your needs.

When Is It a Good Idea to Refinance Quickly?

While the idea of refinancing a mortgage soon after getting the first one may sound odd, there are some clear benefits that can make it an excellent choice in certain circumstances:

Lower monthly payments: If your financial situation has changed and you need a lower monthly payment, refinancing could make it possible to get a loan with a longer term. And if interest rates have dropped since you first got the loan or your credit score increased dramatically, qualifying for a lower interest rate could also reduce how much you owe each month.

Eliminated private mortgage insurance (PMI): Conventional mortgages typically require PMI if you put down less than 20% of the loan amount at closing. If, however, the value of your home increased quickly or you’ve made a large payment and qualify to get rid of it, refinancing could save you money. Also, some government-insured loans charge mortgage insurance, and refinancing one into a conventional loan could get rid of it.

Change in interest rate structure: Borrowers can choose a fixed- or adjustable-rate mortgage (ARM). While an ARM can save you money upfront with a lower fixed interest rate for a set period, it becomes variable once that period ends. If you notice that interest rates are rising and want to lock in a low fixed interest rate to avoid taking on too much risk, refinancing can allow you to do that.

Equity cash-out: If you need cash fast and want to avoid high-cost loans, doing a cash-out refinance will give you access to some of the equity in your home at the cost of the new mortgage loan.

Borrower removal: If you were recently divorced and both spouses were on the loan, it may be a good idea to refinance the mortgage into the name of the person who plans to live in the home.

What Should I Consider Before Refinancing?

While refinancing a mortgage loan can provide a lot of benefits, there are some things that could make you think twice about starting the refinance process:

Loan costs: Mortgage loans, including refinance loans, typically include closing costs that can range from 2% to 5% of the loan amount. If your mortgage is $200,000, that’s between $4,000 and $10,000 that can eat into the potential savings or other benefits you’d get from refinancing. It’s essential that you take the time to calculate your potential savings from a refinance compared with the costs to close the loan.

Other costs: If you’re refinancing your loan to get rid of one form of mortgage insurance, it’s possible that the new loan will require another form. Make sure you understand the terms of each mortgage type to get an idea of what your ongoing costs will be. Also, pre-payment penalties can make it difficult to get out of your original loan.

Credit situation: If your credit scores have changed since you got your first loan, it could affect your chances of getting approved for a refinance loan with more favorable terms. The same goes if your debt-to-income ratio (DTI)—your monthly debt payments relative to your monthly gross income—has increased in the meantime.

There are many good reasons to refinance a mortgage loan, but carefully consider these things to make sure your reason is good enough.

Will Refinancing Affect My Credit Score?

Virtually every time you apply for a loan, the lender will run a hard inquiry on your credit report. This inquiry can knock a few points off your credit score. If you’re applying for multiple mortgage loans, each additional inquiry can have a compounding effect on your score, dropping it further.

As a result, it’s best to do all your rate shopping in a short period (typically between 14 and 45 days), during which all your inquiries will be counted as one for credit scoring purposes.

Also, closing out your old mortgage loan and replacing it with a new one can negatively affect your credit score because it lowers the average age of your credit accounts.

Because refinancing can have an impact on your credit, it’s important to make sure your credit is in good shape before you start the process.

Source: When Can I Refinance My Home?

Thursday, September 26, 2019

Crosstown Parkway Celebration Community Block Party

The end of the construction for the Crosstown Parkway Extension Project marks a new beginning for the City of Port St. Lucie, residents and visitors. With more than 195,000 residents, the City worked diligently since 1980 to make this project and corridor a reality for the community.

The project provides a new bridge crossing over the North Fork of the St. Lucie River, connecting the existing Crosstown Parkway from Manth Lane to U.S. 1 Highway at Village Green Drive. The project is approximately two miles long with a 4,000 foot bridge. The six-lane divided highway and bridge will include accommodations for automobile, bicycle, pedestrian and public transit. The project will help alleviate traffic congestion, providing relief to the two existing crossings at Port St. Lucie and Prima Vista Boulevards. The project will improve public safety, emergency response times, help reduce travel times and enhance mobility.

Wednesday, September 25, 2019

Getting Your First Mortgage When Buying Your First Home.


Time to buy a home? Getting your first mortgage doesn’t have to be hard. Start the mortgage process early and gain some understanding of how mortgages work.

Home ownership is exciting. You have decided it is the right time to buy your first home. Now is the time to go about getting your first mortgage. The first thing you should do before even looking at houses is take a look at the money involved. It is time to sit down with a mortgage officer and review your finances and discuss your options.

The mortgage process is one of the more complicated and frustrating pieces when buying a home. It is important to start the mortgage process early with a good mortgage officer. It will make the whole buying experience much smoother.

A little understanding can go a long way in preventing frustration. Start the mortgage process first and be pro-active.


There are three major aspects that go into your credit profile and getting approved for a mortgage. Your ability to secure credit on a home hinges on what is commonly called the 3 C’s. Basically you must document to the bank your ability to handle the 3 C’s, credit, capacity and income.


Your credit score will play a major role in your interest rate and programs that are available to you. Most loan programs will want to see a minimum credit score of 620 to 680. While there are programs that can go down to a 580 credit score the terms are definitely less favorable to you. Your credit score shows your history in handling credit to your lender.

Pulling your credit score immediately will be a big help in the process. It will give you time to correct any mistakes as well as maybe be able to raise your credit score by the time your ready to actually get a mortgage.


Your ability to repay the mortgage is called capacity. They will look at earnings history and confirm it is stable and re-occurring. As a rough guideline the banks want no more than 41% of your gross earnings going towards debt service. This is called debt to income ratio. Debt service will include mortgage, interest, insurance on housing and any consumer debt. Consumer debt could include a car payment, minimum credit card payments, student loan payments would fall into the category of consumer debt.

Take a couple earning $9000 a month. They have a car loan of $400/mo, two credit cards with a minimum payment of $250/mo and student loans totaling $750/mo. A 41% debt to income ratio would allow up to $3014 a month towards principal, interest and insurance.


Collateral is the available funds you have for down payment and closing costs and pre-paids and escrows. Closing costs are the hard costs of obtaining the loan Pre-paids and escrows are money that is either pre-paid like insurance and money that is used to fund escrow accounts for insurance and taxes. Usually you have to fund an escrow account for 3-6 months in advance on insurance and taxes

At a bare minimum the bank wants to see that you have the funds to close. Many loans may require you have reserve or “backup funds” funds leftover of 1-6months worth of payments.

Varying aspects of the 3 C’s will change your credit profile and your ability to get approved for certain programs and your interest rate.


As pointed out above the bank wants to make sure you can handle repaying the loan by analyzing your credit worthiness, your ability to repay and the available cash you have and that the house is worth what they are lending on through the appraisal.

What you probably don’t know is that the bank has institutional guidelines to be met so your mortgage can be easily sold. Most loans need to meet Fannie Mae Guidelines to do so. The loans are grouped and bought and sold by financial institutions on a regular basis to fill out their portfolio needs. Lenders do not hold loans and most banks only hold a small portion of the loans they make.

If a loan doesn’t meet guidelines after it is sold and an audit is done, the lender must buy back the loan. Not good!! This hopefully explains some of the frustration the bank may make you go thru to get a home mortgage. They are checking and double checking that the loan fits the criteria and that anybody down the line can pick the file and see it is compliant.


When applying for a mortgage your mortgage officer will hopefully pull a tri-merge credit report. This credit report is specifically for the mortgage industry and defined by the algorithm used in determining your credit. Your credit score can actually be quite different with a mortgage tri-merge credit report than for a car loan or other lines of credit.

It is called a tri-merge as credit is pulled from 3 credit reporting agencies, Equifax, Experian and TransUnion. Each company will give a credit score. Sometimes they are all close other times there can be a wide swing depending on how they are reporting different lines of credit.

The middle credit score is what will be used though out the process. If there are two borrowers the lowest middle credit score will be used.

It is important to immediately check your credit report for errors…. it happens, more than you think.

A 620 credit score is typically the lowest credit score for mainstream mortgage financing. For approximately every 20 points in credit score there will be an improvement in mortgage rate. Ask your mortgage officer if their are small things you can do to increase your credit score. Many times there is. Sometimes paying down a credit card a few hundred bucks or paying off a car loan early can improve you credit score.

Your credit will typically be pulled every 90 days through out the process. Do not do anything to damage your credit while in the process. Keep your credit profile exactly the same, don’t open a Home Depot credit card in anticipation of you new home, don’t buy a new car or a new boat on credit, etc….


After the credit is pulled and seems satisfactory, your mortgage officer will request to see document to verify your income (capacity) and assets (collateral).

Documents he will request:

2 months worth of pay check stubs

Profit and Loss Statement and 1099’s if you are self employed

2 years W2’s and tax returns

2 months worth of asset accounts, checking savings, retirement etc…

All the information will be input into a an application and then your mortgage officer can make a determination of your eligibility for programs and what your potential interest rate will be. Different scenarios can be run what if you but 3% down vs 5% down or 10% down. At this point you can talk realistic scenarios with your mortgage officer.

From here he will issue a pre-approval letter for you to include with an offer on a home. It is expected in the business a home buyer shows their ability to secure financing or pay cash on a home before an offer is considered.


Once your pre-approval is issued, its time to start looking for homes for sale. While working with your REALTOR, you can use your mortgage officer to run scenarios on specific houses so you know exactly with in a few dollars of what your monthly payment will be. In this time period this is a good time to explore loan programs with your mortgage officer.

It maybe possible you had some issue with your credit report that can be fixed. You can use this time to clean up your credit report. There also may be time to improve your credit with a few small changes. Because you took the proper steps early you now have time to do the things that may improve your credit profile and ultimately save you some money.

Once you get a home under agreement work with your REALTOR and notify your mortgage broker immediately. Often when I am working with a buyer they meet with me first and use a mortgage professional off my list of recommendations. In this case, I have a very close working relationship with your mortgage officer and can handle much of the little details.


It is time to finalize your loan application. It cannot be finalized until a specific property has been identified.

A processor will be assigned for your mortgage file. Their primary job is to package the file and keep the process moving forward. Depending on the lender you are working with you may have contact with the loan processor, as well as your mortgage originator. as they package your file.

When the processor feels the file is complete they order an appraisal on the property and submit the file to underwriting.


An underwriter reviews the application and documents and makes sure your loan meets the extensive criteria for a specific

loan program. Agencies like Fannie Mae or the FHA have certain criteria that needs to be met. Each lender will have their own mortgage overlays or criteria as well

It is not unusual for an underwriter to come back and ask for additional documents or supporting clarification. While it can be frustrating for you the home buyer it is not uncommon for the underwriter to come back several times.

Being pro-active and responsive in this time period is critical. Gather documents and information immediately to keep your file moving through underwriting.


A mortgage commitment is the lenders promise to lend. Most mortgage commitments are conditional. The conditions are usually boiler plate conditions relating to title and pulling credit again and verifying you are still employed on or the day before closing.

You want to make sure that there are not conditions that are your responsibility. If there are conditions relating to you, like documentation or credit make darn sure you understand what is going on. This could be a red flag.

Here in Massachusetts real estate contracts usually provide for a mortgage commitment date. A date prior to closing where you must have a firm commitment to lend or be able to back out of the deal with no recourse. After this point if you can’t get a loan your escrow deposit monies are at risk. Make sure you are comfortable with your conditional commitment before notifying the seller you have obtained commitment.

A real estate agent acting as your buyers agent, will really be worth it at this point. A Buyer’s Agent is used to working with deadlines, understands the process inside out and backwards, track the key dates and protect your interest.


Once mortgage commitment is obtained than your mortgage is in pre-closing, all the loose ends are tied up like title, title insurance, flood certs etc… At this point there isn’t much for you to do the processor will wrap all of this up.

Upon finalizing your mortgage the loan package will be sent to the closing attorney and a Closing Disclosure will be prepared. By law, you must receive your closing disclosure at least 3 days before the closing to review. Your closing disclosure will be an account of all of your escrow deposits, closing costs, fees already paid, fees your paying at closing and the details of your loan.


As you can see buying your first home and getting your first mortgage is complicated. A real estate agent acting as your buyers agent, will really be worth it when buying a home. A Buyer’s Agent is used to working with deadlines, co-ordinating all the people involved, understands the process inside out and backwards, track the key dates and protects your interest.

The biggest problem home buyers make is not understanding what they don’t know! Use a great mortgage officer and a great buyers agent when buying your first home and the process will go smoothly….they know how to guide you thru the process. There is no need to go blindly into the home buying process.

Finally take care of getting properly pre-approved to begin with. By the time you have a house under agreement all the issues should be worked though and it is a matter of submitting your application and you will avoid jumping though last minute hurdles when getting your first mortgage

Source: Getting Your First Mortgage When Buying Your First Home

Tuesday, September 24, 2019

How to choose the right closing date.


Your closing date can make or break your move. Consider these five items when choosing when to close.

Does your closing date really matter?

If you’re about to sign your name to a home purchase agreement, you should be happy (and relieved) that you’ve “advanced the ball” this far downfield. But before you touch that pen to paper, ask yourself this question: “Am I about to agree to a ‘good’ or a ‘bad’ closing date?”

Yes, it does

The right closing date can help reduce your closing costs, and ensure that the remainder of the home-buying process looks like a well-choreographed ballet of financial, legal and real estate professionals.

Related: How long does it take to close a mortgage?

The wrong date could produce a slapstick comedy of errors and costly delays. In some cases, it might even cause the whole deal to fall apart.

To ensure that your transaction proceeds smoothly and on time, follow these 5 tips.

1. Keep your lender in mind

Unless you’re paying cash for the home, choose a closing date that’s convenient for you, the seller and your mortgage lender.

Most people schedule the closing date for 30-to-45 days after the offer has been accepted – and they do this for good reason.

Mortgage lending is a document- and labor-intensive process that requires the various players to coordinate many different steps. Under the best of circumstances, it’s a time-consuming effort.

Related: How to get sellers to pay your closing costs

So include plenty of “wiggle room” in case the unexpected happens – a request for additional documentation or the last-minute discovery of a defect in the home.

If you don’t allow enough time, the closing date might arrive before your financing is approved. If that happens, the seller might be able to cancel the deal in favor of a more attractive offer. Although most sellers will agree to a new date, why take the risk?

On the other hand, it’s important that the closing occur before the lender’s loan commitment expires so you can enjoy the promised interest rate. If the date occurs too late, you might have to negotiate a new rate – or even the entire loan package.

2. Determine your financial priorities

What’s more important to you – better short-term cash flow or reduced closing costs?

If you schedule the closing for late in the month, you’ll pay less interest at closing. If you set the closing for early in the month, you’ll give yourself more time before the first mortgage bill arrives.

For example: if you close in September, your first mortgage payment is due December 1, but prorated interest for the month of September is due at the closing.

Related: How to rush your mortgage to the closing table

If you choose September 25 as a closing date, you’ll owe just five days’ interest at the closing, whereas if you close on the 5th, you’ll pay 25 days’ interest at the closing – a sum that could easily total in the hundreds of dollars.

However, if you close on September 5 instead of the 25th, you’ll pay more interest at the closing, but you won’t have to come up with the (much larger) first mortgage payment for eight weeks (rather than 5 weeks).

In the long term, neither strategy actually saves money. However, they do provide you with options – the option of either paying less at the closing or giving yourself more time to collect your first mortgage payment.

3. Avoid closing on Friday or before a holiday

In theory, closing on a Friday or just before a three-day holiday weekend seems like a great idea. More time for packing, moving and home repairs, right?

The last thing you want is for the attorneys, lenders and other professionals working on the transaction to rush through the process. Under such circumstances, costly mistakes are more likely to occur.

Related: What to expect after your mortgage closing

For that reason, some experts recommend choosing a date in the middle of the week so the participants won’t feel pressured to dash through all the paperwork.

4. Coordinate the date with your scheduled move

Choose a closing date that coincides with the date when you’ll be ready to actually take possession of the house – whether you’re planning to occupy the home at that time or simply perform a few repairs.

To save money on prepaid interest (see Tip #2 above), some home buyers set a date that’s well in advance of when they intend to move into the house.

While reducing the first interest payment can be a smart move, what’s the point of saving that money if you won’t be using the property for two or three weeks following the close?

Coordinate the utilities

If you’ve ever been without electricity, water and natural gas for more than a day, you know that this is an experience you’d rather not repeat. So be sure the local utilities will be able to supply your house with power just before or after the closing date.

A house without modern conveniences may seem like a minor annoyance – until you actually have to endure it for any length of time.

Your mortgage rate can also depend on your closing date, because the longer you lock in your rate, the more it costs.

Lock in the correct amount of time at the outset and save yourself some money.

Source: How to choose the right closing date | Mortgage Rates, Mortgage News and Strategy : The Mortgage Reports

Monday, September 23, 2019

Thursday, September 19, 2019

Market Update Aug 2019!

Here are five market updates to help you answer consumer FAQs about real estate. We’ve taken statistics straight from Florida Realtors® to custom create these for you and your customers. Thanks for being our member!

To see the full list of counties, click HERE

Tuesday, September 17, 2019

Here's how long it takes to improve your credit score.


Generally speaking, the higher your credit score, the better off you are. But the recovery time from a missed payment or financial setback differs for everyone.

Generally speaking, the higher your credit score, the better off you are when seeking a loan.

But the recovery time from a missed payment or financial setback of any kind differs for everyone.

As many consumers know, your credit score plays a big role in daily life. It can determine the interest rate you’ll pay for credit cards, car loans and mortgages — or whether you’ll get a loan at all.

Those three digits can save you tens of thousands of dollars over time, or cost you just as much.

“Depending on your credit history, a 15- or 20-point shift could mean the difference between being approved or declined or better terms or higher costs,” said Rod Griffin, the director of public education at Experian, a major credit-reporting firm.

The good news is that average credit scores have steadily ticked higher since bottoming out during the housing crisis about a decade ago, when there was a sharp increase in foreclosures. Now scores are at an all-time high, according to FICO, a leading credit-scoring company. FICO scores range from 300 to 850.

However, a missed payment or default can quickly drag your score down, sometimes significantly. (See financial comparison site SuperMoney’s charts below based on data by VantageScore and FICO.)

The best way to increase your credit score comes down to paying your bills on time or reducing your credit-card balance. (The common advice is to keep revolving debt below 30% of your available credit so that your utilization rate doesn’t hurt your credit score.)

Your payment history and utilization rate typically account for 60% to 70% of a credit score, according to Experian.

Such positive credit behaviors can start to improve your score as soon as a few billing cycles. “As a rule of thumb, you could see an appreciable difference in six months,” said Ted Rossman, industry analyst at

However, that also depends on the issues you are trying to overcome.

For example, “if a missed payment has dragged your score down, your score could rebound in a month or two, a series of late payments will take longer to make a full recovery,” Griffin said.

Being late on a mortgage payment is a more serious problem, yet you can recover from that in as little as nine months. File for bankruptcy, on the other hand, and it could take 5 years to 10 years to get back to where you once were, according to Miron Lulic, the founder and CEO of SuperMoney.


Source: Here’s how long it takes to improve your credit score

Monday, September 16, 2019

Here are the benefits of using an in-person mortgage lender instead of an online lender.

Online lenders are now among the largest originators of mortgages, but local lenders continue to attract customers who crave an experience and connection they feel is unavailable on the internet.

“They know we’re part of the same community that they live in and care about the same things,” said Jennifer Cowles, vice president of mortgage lending and loan servicing at Workers Credit Union. “We’re nurturing relationships.”

Credit unions accounted for 9% of the $1.75 trillion in mortgages originated nationwide in 2017, according to U.S. mortgage market statistics for 2018 compiled by MagnifyMoney by LendingTree. Banks were responsible for 40% of mortgages and nonbank lenders, like online originators, originated 51%.

Just 3% of 5,187 mortgage customers surveyed only used digital self-service channels for their loan process, according to the J.D. Power 2018 U.S. Primary Mortgage Origination Satisfaction Study. Researchers found that “overall satisfaction is highest among customers who spoke only with their lender in person or over the phone (871) when applying for a mortgage, followed by satisfaction among those who used a mix of personal and self-service tools (868).”

Workers Credit Union members appreciate that they can get service over the phone or at a branch, Cowles said. “We can be face to face very easily if that’s the way the member prefers to deal with us.”

While some borrowers like the speed and convenience that online mortgages offer, others want the human touch. “When it comes to big financial decisions, some people just feel more at ease doing business in person,” according to an Investopedia article comparing Quicken Loans vs. your local bank. “If you are the type of person who likes to look people in the eye when getting advice, a local lender might be the best way to go.”

Borrowers also like knowing that their mortgage payments help their community when they use a local bank, Investopedia noted. “Smaller banks also tend to support local events and charities, thus bolstering the local community.”


Thursday, September 12, 2019

Mortgage applications are on the rise!


Homebuyers are taking advantage of lower mortgage rates and a slow summer for sellers, and that is driving mortgage applications higher. Total mortgage application volume rose 2% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was up 69% than the same week one year ago, when interest rates were much higher. The week’s results included an adjustment for the Labor Day holiday.

Source: Weekly mortgage applications rise as buyer’s market takes hold

Wednesday, September 11, 2019

Mortgage payment or rent? There's no contest study finds!

Homeownership has been so positive for most owners, that they would never choose to return to renting.

A new study from the Bank of America found that 83% would never go back and 93% said that their lives have been happier because of homeownership.

The Homebuyer Insights Report also discovered that 88% said buying their home was the best decision they ever made while 79% said it has changed them for the better.

Emotional attachment and improved lifestyle both contribute to their happiness. And many said they have benefitted from new hobbies such as gardening/landscaping and interior design/remodeling.

“We know how much homeownership means, and we see examples every day of how owning a home gives our clients the power to build personal wealth and make memories,” said D. Steve Boland, head of Consumer Lending at Bank of America. “They’ve told us very clearly that homeownership is invaluable, and that’s why we’re actively providing assistance with down payment and closing costs to help people buy homes and create a new lifestyle.”

Being able to house the whole family under one roof (24%), a sense of pride (47%), and allowing them to entertain more (49%) were all cited as positive changes since buying a home.

Emotions vs. equity

While respondents said homeownership builds both emotional and financial equity, it is the emotional value that is most important.

More than half of current homeowners define a home as a place to make memories, compared to 42% who view a home as a financial investment.

Most Americans agree that owning one is a way to build lifelong memories with loved ones, and 70% say they are more emotionally attached to their homes than they anticipated. More than two-thirds believe it would be difficult to move from their home because of the memories made there.



Monday, September 9, 2019

Are Homeowners Happy? Survey Says: You Betcha!


A new survey conducted by Bank of America has found the vast majority of homeowners are highly satisfied with owning their residences and would never go back to renting.

According to the new Bank of America’s Homebuyer Insights Report that polled 1,919 adults, 93 percent of respondents said they were happier because they bought a home, with 88 percent stating it was the best decision they have ever made and 79 percent claiming that owning a home has changed them for the better. Two-thirds of respondents who are homeowners said their relationships with family and loved ones have changed for the better since purchasing a home, and 78 percent are satisfied with the quality of their social life–a higher share than the 58 percent of prospective homebuyers who were quizzed on the quality of their social life. As for giving up homeownership, 83 percent of respondents that own a residential property said they would never go back to renting.

“We know how much homeownership means, and we see examples every day of how owning a home gives our clients the power to build personal wealth and make memories,” said D. Steve Boland, head of Consumer Lending at Bank of America. “They’ve told us very clearly that homeownership is invaluable, and that’s why we’re actively providing assistance with down payment and closing costs to help people buy homes and create a new lifestyle.”

Source: Are Homeowners Happy? Survey Says: You Betcha!

Wednesday, September 4, 2019

Homeownership is the Top Contributor to Household Wealth


Two US Census Bureau researchers have determined that the biggest determinants of household wealth are owning a home and having a retirement account.  While that may not be surprising, the degrees of magnitude are.

Using data from the 2015 Survey of Income and Program Participation, Jonathan Eggleston, an economist, and Donald Hays, a survey statistician in the Bureau’s Social, Economic and Housing Statistics Division found that the wealth inequality between homeowners and renters is striking, with the former having median net worth 80 times that of the latter.  Further, they found wide variations in wealth across demographic and socioeconomic groups.  Given that the two are using 2015 data and with the rapid increase in home values since then, the degree of inequality today is probably greater.

The authors say net worth is an important indicator of economic well-being that provides insights into a household’s economic health.  For example, during financial hardships such as illness or unemployment wealth is a buffer.  It is measured by the value of assets owned minus the debts owned.  Therefore, net worth can be negative. Households in the top 1 percent of net worth were excluded from the study.

About half of households had outstanding unsecured debt with a median of $7,500.  Credit card and store bills were the most common unsecured liability and about one in five households had outstanding student loan debt, with a median for those that did of $20,000.

Source: Homeownership is the Top Contributor to Household Wealth