By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
AmextaFinanceAmextaFinance
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Notification Show More
Aa
AmextaFinanceAmextaFinance
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
AmextaFinance > Small Business > How Lenders Can Help Unlock Trapped Equity
Small Business

How Lenders Can Help Unlock Trapped Equity

News Room
Last updated: 2023/10/04 at 5:14 PM
By News Room
Share
5 Min Read
SHARE

Jarred Kessler is the CEO of EasyKnock.

Contents
The Trapped Equity Crisis: Bridging The Mortgage GapUnlocking Equity: Fueling The Next Economic BoomBeyond HELOC: Diverse Avenues To Unlocking EquityThe Macro State: A Call To Action

The housing market has always played a pivotal role in the intricate tapestry of economic development. However, a “trapped equity crisis” threatens to unravel the potential benefits that this sector could bring to the economy. The trapped equity crisis has not only cast a shadow over individual financial prospects but also imperiled broader economic growth. Lenders can take steps to help address this trapped equity. In doing so, I believe they could help unleash a new wave of economic prosperity.

The Trapped Equity Crisis: Bridging The Mortgage Gap

I have spent the past eight years studying the impact and effects of this crisis, and I also started a company that provides sale-leaseback services to try and help address the problem. I’ve seen firsthand that many people are locked out of the mortgage markets due to lending criteria, income disparities and credit limitations. At the same time, many current homeowners feel trapped by their low-rate mortgages. In fact, a survey by Realtor.com found that more than 80% of people wanting to buy or sell a home feel like they’re “locked in” due to low mortgage rates.

The implications of this trapped equity are far-reaching: It can stifle economic mobility, homeownership dreams and the ability to invest in education, businesses and retirement.

Unlocking Equity: Fueling The Next Economic Boom

While the trapped equity crisis presents a challenge, it offers a unique opportunity for lenders. By enabling people to access their trapped equity, lenders have the potential to help fuel a remarkable economic boom. When people can tap into their home equity, they gain the means to invest in renovations, education or startups, thereby stimulating demand in various sectors of the economy. From my perspective, this surge in demand could lead to increased job creation, enhanced consumer spending and, ultimately, sustainable economic growth.

Beyond HELOC: Diverse Avenues To Unlocking Equity

The solution to the trapped equity crisis extends beyond traditional home equity lines of credit (HELOC). I’ve observed various innovative financial instruments gaining traction, including home equity agreements and equity-based credit cards. Home equity agreements enable individuals to access funds in exchange for a share of their home’s future value appreciation. Equity-based credit cards extend a line of credit backed by the home’s equity value, offering a flexible borrowing option. Alternatives such as these can help democratize access to equity and offer tailored solutions for various financial needs.

The Macro State: A Call To Action

Current macroeconomic trends underscore the urgency to address the trapped equity crisis. As income inequality widens and the wealth gap grows, finding ways to redistribute financial resources becomes imperative. The trapped equity crisis exacerbates these challenges, amplifying disparities and curbing economic vitality.

The wealth gap has reached staggering levels, with the top 1% of earners in the U.S. holding more wealth than the bottom 90% of Americans combined. Homeownership rates among young adults have declined, largely due to the inability to access affordable mortgages. Innovation in the financial sector, marked by the rise of alternative equity-unlocking mechanisms, points to a growing need for flexible solutions catering to various financial situations.

Here are some tips for lenders:

• Look at programs that help people buy down their rate.

• Encourage FICO repair.

• Look at alternative programs and consider all of the options.

The trapped equity crisis is a formidable challenge that demands immediate attention and innovative solutions. As much of the housing market grapples with limited access to the mortgage markets, I believe our economy remains deprived of its full potential. By helping unlock this trapped equity, lenders can usher in a transformative era of economic growth where people are empowered to invest, spend and secure their financial futures. It’s time to address this crisis, not only for the sake of individuals but also for the prosperity of our entire nation.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?

Read the full article here

News Room October 4, 2023 October 4, 2023
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Israel aims to maintain ‘aerial superiority’ over Iran

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

UBS, Citi and other banks hit with $21.5mn penalty over Singapore money-laundering case

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

Hitachi Energy says AI power spikes threaten to destabilise global supply

Stay informed with free updatesSimply sign up to the Artificial intelligence myFT…

The Lunar Society is a cautionary tale for Trump’s America

Unlock the White House Watch newsletter for freeYour guide to what Trump’s…

Indian regulator temporarily bans Jane Street from dealing securities

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects…

- Advertisement -
Ad imageAd image

You Might Also Like

Small Business

Why Do We Stay In A Job When We Are Not Happy? Insights To Help You Get The Career You Deserve

By News Room
Small Business

Making A Large Language Model Transparent, Compliant And Reliable

By News Room
Small Business

The Important Initiative For Real Digital Marketing Results

By News Room
Small Business

The Future Of Real Estate

By News Room
Small Business

How AI Is Transforming Healthcare Risk Adjustment

By News Room
Small Business

How Do Hard Knocks Help? 5 Life-Changing Lessons Taught By Adversity

By News Room
Small Business

Lessons Learned From The World’s Most Successful Startups

By News Room
Small Business

Small Business Saturday Encourages Consumers To Shop Small And Local

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

YOUR EMAIL HAS BEEN CONFIRMED.
THANK YOU!

Welcome Back!

Sign in to your account

Lost your password?