Connect with us

CBS News

Should you use home equity to cover holiday spending?

Avatar

Published

on


Woman hidden by her shopping bags and boxes
Using your home equity to cover holiday expenses could be a risky route to take, experts say.

Getty Images


The holidays are near, and many Americans are now looking for ways to finance their celebrations. But credit card rates have climbed to an all-time high of over 23% on average, making traditional holiday spending much more expensive. As a result, some homeowners may wonder if they should tap into their home’s value instead.

Currently, the average homeowner has more than $300,000 in home equity. That’s a lot of potential spending power. But should you borrow from your home’s equity to pay for holiday expenses? While tapping into your home equity with a home equity loan or a home equity line of credit (HELOC) can seem like an easy borrowing solution, homeowners need to think carefully about the risks.

We spoke with mortgage and financial specialists to help you decide if using home equity makes sense for your holiday spending. They shared insights about current rates and what this choice could mean for your future.

Learn how affordable a home equity loan could be today.

Should you use home equity to cover holiday spending?

“Generally, it’s not a great idea to use your home as a piggy bank,” warns Dean Rathbun, a mortgage loan officer at United American Mortgage Corporation. He explains that home equity is typically best used for things that add value to your home, such as remodeling projects.

Peter Diamond, founder of the American Institute of Bankability Experts (AIBE), agrees. He points out that using home equity for holiday expenses means paying significant interest on purchases offering no lasting value. With HELOC rates averaging between 8.61 currently and home equity loans averaging 8.41%, holiday debt could cost you more than planned.

Here are the pros and cons to consider before making your choice:

Pros of using home equity to cover holiday spending

While most financial experts will tell you not to use home equity for holiday expenses, there are some advantages to consider.

Here are the main benefits:

  • Lower interest rates than credit cards: Your home equity loan rate will likely be much lower than what you’d pay on a credit card.
  • More time to repay: Justin Mankita, capital markets manager at Tomo Mortgage, highlights monthly payments can be more manageable because you have a longer time to pay back the loan.
  • Quick access to funds: “[It’s] like pressing the easy button,” says Diamond. You can get what you need instantly for your desired holiday experience.
  • Simple monthly payments: Unlike juggling multiple credit card bills, you’ll have one monthly payment.

Compare today’s best home equity borrowing rates online now.

Cons of using home equity to cover holiday spending

In most cases, the cons of home equity borrowing for the holidays outweigh the pros.

Here are the main drawbacks to consider:

  • Foreclosure risk: “You’re using your home as collateral, so the risk of foreclosure is real if you can’t make payments,” cautions Mankita.
  • Extra costs upfront: You’ll need to pay closing costs to get the loan, which means spending money to borrow money.
  • Borrowing minimums: Most lenders require you to borrow at least $10,000 to $15,000, even if you need less.
  • Long-term impact on wealth: Diamond reminds us that holiday expenses give no lasting value, but the debt keeps adding up with interest. This can hold you back from investments that build wealth.
  • Negative future borrowing power: The payments will increase your debt-to-income ratio, making it harder to qualify for other loans.
  • Reduced home equity: You’re trading years of built-up home value for short-term purchases that will be forgotten long before the debt is paid off.

Alternatives to consider for holiday expenses

Mankita and Diamond recommend trying these options before putting your home on the line:

  • Test your budget first: Try saving the amount you’d pay monthly on a home equity loan. “If it’s challenging to save that now, it’s likely the loan payments would be tough to manage in the future,” stresses Mankita.
  • Look for zero-interest deals: Many stores offer special holiday financing with no interest if paid within a set time. This works well if you have a solid payment plan.
  • Start a holiday savings fund: Set aside a small amount each month starting now for next year’s holidays. This helps avoid debt altogether.
  • Consider a 401(k) loan: While not ideal, this option keeps the debt between you and your retirement account. Just remember you’ll miss out on investment growth.

The bottom line

Home equity should be your last resort for holiday spending — not your first choice, experts say. Diamond mentions it might make sense for essential purchases that offer lasting value, such as a computer for your child’s education. But think carefully before using your house as collateral for holiday spending.

Before making any decisions, talk with a home equity lender or HELOC lender about your situation. They can help you explore all your options, including zero-interest store cards and holiday savings accounts. Together, you can create a plan that won’t put your home at risk. After all, the best holiday gift you can give yourself is a secure financial future.



Read the original article

Leave your vote

Continue Reading

CBS News

Judge expected to reveal next steps in Trump sentencing in “hush money” case

Avatar

Published

on


Judge expected to reveal next steps in Trump sentencing in “hush money” case – CBS News


Watch CBS News



A New York judge is set to decide how to move forward with President-elect Donald Trump’s conviction and sentencing in his “hush money” case. CBS News investigative reporter Graham Kates has more.

Be the first to know

Get browser notifications for breaking news, live events, and exclusive reporting.




Read the original article

Leave your vote

Continue Reading

CBS News

Chicago owed nearly $20 million in police overtime for special events this year; taxpayers may be on the hook

Avatar

Published

on


Chicago street festivals underestimate crowds by tens of thousands, endangering attendees


Chicago street festivals underestimate crowds by tens of thousands, endangering attendees

07:32

CITY HALL — The city spent $22.6 million on police overtime for special events this year but has only been reimbursed $2 million, leaving taxpayers to cover the remaining costs.

City law requires special event producers to pay for police services beyond 12 shifts. However, an investigation by Block Club Chicago and CBS Chicago revealed through records requests that the city has not been retroactively charging for those costs.

Chicago hosts hundreds of street festivals each year, with approximately 1,300 events held between 2021 and 2023. During that period, nearly 2,800 Chicago police officers logged a combined total of 27,000 overtime hours to patrol these events, according to a CBS News Data Team analysis of police overtime records and special event permits.

At a Chicago Police budget hearing on Friday, officials confirmed that a significant portion of the overtime associated with special events has gone unreimbursed, attributing the issue to a “decentralized system.”

In 2024, the police department spent $22.6 million on special event overtime across various music, street, and neighborhood festivals. About $7.2 million of that is attributed to ticketed events like Lollapalooza, the Chicago Marathon, and NASCAR. However, the city has only been reimbursed for Lollapalooza and the Chase Corporate Challenge, totaling just under $2 million, police officials disclosed on Friday.

The 2024 figures are an increase from 2023, which saw $19.2 million spent in police overtime across all special events, police officials said. It’s currently unknown how much of that was reimbursed to the department. Special events include large ticketed festivals, street festivals, athletic events and bar crawls. Chicago hosted 677 special events in 2023, according to records obtained by CBS Chicago. 

The revelation aligns with months of unanswered public records requests directed at the Department of Finance, which has been unable to produce invoices for police overtime at street festivals.

While the department did provide invoice data for traffic control aides at events like Riot Fest, Lollapalooza, and several 5Ks, it referred CBS News to the city’s Public Safety Administration for police overtime. However, the Public Safety Administration has not responded to records requests for police overtime details and did not return requests for comment.

“What may make more sense is we can provide all of our historical data about what our costs are, and we can provide that to DCASE, we can provide that to the Department of Finance. We can give a unified city service quote at the front end,” said Ryan Fitzsimons, Deputy Director at the Chicago Police Department.

During a budget hearing for the Department of Cultural Affairs and Special Events last week, officials revealed that their department is not involved in the invoicing process for reimbursing police overtime, raising concerns among aldermen that permits are being issued to event producers with outstanding balances.

On Friday, police officials said that despite the lack of reimbursement, they do not have the authority to block special event permits unless there are safety concerns. This lack of enforcement power leads to ongoing accountability issues with invoicing, they noted.

“We conduct numerous after-action meetings with OEMC and other city agencies. The problem is that, while we identify these reimbursement issues during those meetings, they are not addressed in subsequent permits issued the following year,” said Chief Duane DeVries, head of the Bureau of Counterterrorism with the Chicago Police Department.

After each permitted special event, the Chicago Police Department generates an “event evaluation form” that tracks the number of incidents and officers assigned to the event.

On Friday several aldermen requested event evaluation forms for various Chicago’s special events.

In July, the CBS News Data Team and Block Club Chicago requested event evaluation data for various events from 2019 to 2024, including PrideFest, Market Days, Wicker Park Fest, and Lollapalooza. The department said the evaluations were kept on paper. A request for those documents was made in August. As of last week, the department is still working on that request. 

All special event producers are required to present security plans to Chicago Police for feedback before the city’s events department issues a permit. The amount of private security is determined by various factors, including the event’s history, location, current events and crime trends. Event organizers suggest a security plan and the police department approves, denies and makes suggestions.

Because of this, some special event producers have argued that they should not be required to pay for police overtime. 

“It’s like someone coming and painting your house and then saying, ‘I want you to pay for it.’ … Well, I didn’t want you to paint my house,” Hank Zemola, CEO of Special Events Management, previously said. “I ordered all this (security) so we wouldn’t have to do that.”

Special Events Management puts on numerous special events including street races and neighborhood street festivals. The company organizes some of the city’s most popular street festivals like Pridefest, Ribfest and others.

By city law, street festivals cannot charge an entry fee but can propose suggested donations for entry. With suggested donations in decline, inflation making festivals more expensive to produce and consumers spending less, Zemola estimates that at least 50% of the company’s events this year lost money.

Still, with the City Council looking for cost-saving measures aldermen are eager to close the loophole that is hemorrhaging money from this city.

“I hope that with the information … your department provides us, we can, from the council side, work on maybe a better process that gives you guys … a seat at the table … so that we can better manage and join our resources,” said Ald. Maria Hadden (49th).


This story was produced under a collaboration with Block Club Chicago, a nonprofit newsroom focused on Chicago’s neighborhoods, and CBS News Chicago. Melody Mercado contributed to this report.



Read the original article

Leave your vote

Continue Reading

CBS News

As Canada delays medically assisted dying in mental illness cases, some find relief, others fear consequences

Avatar

Published

on


When Savannah Meadows had lunch last October with her mother, Sharon Turcott, Meadows was “all smiles,” the mother told CBS News. 

“Maybe she’s turned a corner,” Turcott recalled thinking about her daughter, who had been struggling with serious mental illness.

The next morning, she received a scheduled email: “Mom, if you’re reading this, I’m probably on my way to heaven,” it said. Her daughter had taken her own life at the age of 44.

canada-maid.jpg
Savannah Meadows is seen at lunch with her mother, Sharon Turcott, in an October 2023 photo shared with CBS News by Turcott. 

Sharon Turcott


“She did not want to die by suicide. She did not want to die alone,” Turcott said.

Instead, Meadows had been seeking a medically assisted death — something Canada legalized in 2016. It had been set to expand last year to patients who were suffering solely from mental illness, but that expansion was delayed, and Meadows ultimately died by suicide. 

The delay has been welcomed by some, but condemned by others. 

The history of Canada’s, still evolving MAID law

In 2016, Canada enacted a law allowing medical assistance in dying, known as MAID, for people whose natural death is reasonably foreseeable. Under the law, following a process establishing that all eligibility criteria have been met, a physician or nurse either directly administers a substance that induces death or prescribes a drug that the person takes themselves.

Five years later, the law was expanded, no longer requiring a person’s death to be reasonably foreseeable as an eligibility criterion for adults with a grievous and irremediable medical condition. Under the changes, individuals suffering solely from mental illness were temporarily excluded for eligibility until March 2023. 

Meadows, described by her mother as a proud trans woman, had picked a date and began preparations for the end of her life. 

“It gave me time to accept the fact that my daughter was going to die,” Turcott said.

A few days before Meadows would potentially have been eligible to seek a medically assisted death, however, the government announced a yearlong delay for the consideration of cases of mental illness. Seven months later, Meadows died by suicide.

The delayed inclusion of patients seeking MAID on the basis of mental illness has been met with apprehension from the start. 

Canada’s Expert Panel on MAID and Mental Illness, established to assist in developing the government’s approach to the expansion of the law, outlined concerns in a 2022 report, including the daunting task for clinicians asked to make predictions about individual patients and establish incurability and irreversibility despite the difficulties of predicting the evolution of mental disorders.

Another factor was what the report referred to as structural vulnerability, or the risk of factors such as unstable housing or lack of employment opportunities resulting in individuals viewing death as an only option.

The panel offered a number of recommendations in its report for establishing an expanded MAID regime.

The future of the MAID law’s expansion, however, is also dependent to some degree on domestic politics, which appear set to shift. Pierre Poilievre, whose Conservative Party is up by a significant margin in polls ahead of national elections set to take place within a year, has vowed to “revoke entirely” the expansion of the law to include solely mental health cases, arguing that it blurred a line “between suicide prevention and suicide assistance.”

“She would have died the way she wanted to.”

Since her daughter’s death, meanwhile, Turcott has become an advocate for MAID access for those whose sole underlying condition is mental illness.

“She would have died the way she wanted to, and because that’s what she wanted, that would have been fine with me,” Turcott said. “Suicide was not fine with me.”

canada-maid2.jpg
Savannah Meadows is seen during a shopping trip with her mother, Sharon Turcott, in a photo shared with CBS News by Turcott. 

Sharon Turcott


In February, the government further postponed MAID eligibility for patients whose sole condition is mental illness until March 2027 — four years after it was initially slated to go into effect. 

Mark Holland, Canada’s Minister of Health, said that while “significant progress has been made in supporting practitioners in assessing MAID eligibility in complex cases,” the country’s health system was “not yet ready for MAID where the sole underlying condition is mental illness.”

The delay has been condemned by some MAID advocates. Dying With Dignity Canada, an organization that advocates for end-of-life rights, filed a lawsuit in August alleging discriminatory exclusion in the law against people with mental illness.

An ongoing debate over access to MAID

Others, however, view the delay as a step to ensure necessary safeguards are in place and health care providers are prepared to handle relevant cases. The Canada Mental Health Association said in a January statement that it supported the postponement, citing what it called insufficient time and resources allocated to ensure that people with mental illnesses can access the necessary care.

Some groups oppose the law’s expansion outright. In September, Inclusion Canada, a nonprofit group that advocates for Canadians with intellectual disabilities, filed a lawsuit challenging MAID for people with a disability who are not dying or whose death is not “reasonably foreseeable.” 

The lawsuit argues that MAID Track 2, the 2021 expansion of the law to include patients whose deaths are not reasonably foreseeable, had already resulted in premature deaths.

“People are dying. We are witnessing an alarming trend where people with disabilities are seeking assisted suicide due to social deprivation, poverty and lack of essential supports,” Krista Carr, executive vice-president of Inclusion Canada, said in September.

Compounding CMHA and Inclusion Canada’s concerns, an expert committee of professionals from disciplines including ethics, social work and medicine that reviewed MAID deaths in Ontario identified cases in which it said isolation and unmet social needs, such as housing, had fueled several euthanasia recipient’s requests. 

The committee also found that patients seeking eligibility under the expanded Track 2 criteria were about 8% more likely to reside in areas of the province with high levels of social marginalization than MAID Track 1 recipients.

The committee’s report acknowledged that while the deaths discussed were not necessarily representative of frequent reasons for accessing MAID Track 2, or even the majority of MAID Track 2 deaths, the themes identified were “not uncommon within the MAID review process.” 

Out of 4,644 medically assisted deaths carried out during 2023 under Canada’s MAID law, only 116 deaths were Track 2 patients, according to the committee.

But the report’s findings don’t resonate with everyone, and opposition to the law’s proposed inclusion of patients who suffer from only mental illness has been deeply frustrating for some people seeking MAID. 

Jason, a Toronto resident who didn’t want to be fully identified over concerns that his future MAID review process could be affected, is one of those people.

“When I first heard that it was delayed, my world came crashing down,” he said.

Jason told CBS News that he’s struggled with depression, anxiety and panic attacks for decades, and has attempted suicide twice. He said he’s tried inpatient programs, medication, electroconvulsive therapy and ketamine treatment, among other remedies, to little avail.

“I would not be alive today if there wasn’t the possibility of MAID going through in 2027,” he said, saying the chance of MAID’s expansion was the only reason he hadn’t attempted suicide a third time.

The current safeguards for those seeking MAID whose death is not reasonably foreseeable include two independent practitioners — one of whom must have expertise in the condition affecting the patient — confirming that all eligibility criteria are met, a minimum period of 90 days for eligibility assessments to be made, and the opportunity for the patient to withdraw consent at any point up until the procedure is carried out.

The patient must also be informed of counseling and palliative care options, support for disabilities and mental health, and be offered consultation with relevant professionals in addition to having discussed with their practitioner “reasonable and available means to relieve the person’s suffering, and agree [with the practitioner] that the person has seriously considered these means.”

In a poll conducted in 2023 by Dying with Dignity Canada, 78% of respondents said they supported the removal of the “reasonably foreseeable” natural death requirement from the MAID law, indicating strong support for the Track 2 expansion. But a 2017 survey gauging the attitudes of Canadian psychiatrists toward medical assistance in death found only a minority of 29.4% supported MAID on the basis of mental illness alone, compared to 71.8% who said other factors should also be present to determine eligibility.

Jason said he understood some doctors’ opposition to MAID for mental illness.

“Doctors are there to make you better,” he said. But he added that as mental illness isn’t something that “shows up on a screen,” it can be difficult for people without direct experience to understand the extent of someone else’s pain.

“I don’t have the physical pain that someone else has, but the psychological pain is just as bad,” he said.

In 2022, MAID deaths accounted for 4.1% of overall deaths in Canada, with the average age of MAID patients being 77, according to Canada’s fourth and most recent annual report on Medical Assistance in Dying. Since the law was introduced in 2016 there have been a total of 44,958 medically assisted deaths in the country.

Jason said he didn’t want to put his family through the trauma of another suicide attempt, and that his brother and mother were helping him explore options abroad. Those options, especially for people suffering mental illness, are limited, and often complicated by varying domestic laws around the world.  

Jason said that, like Turcott, his own mother is supportive of his choice to seek MAID.  

“As much as she doesn’t want me to do this again, she would rather I die properly with the assistance of a doctor than have it done by suicide,” he said.

Turcott said she was concerned that the postponement of MAID on the basis of mental health would result in more suicides, leaving families to mourn unexpectedly.

“I don’t want anybody to experience the loss of their child through suicide, and their child being so desperate that they saw no other choice but to take their life,” she said.



Read the original article

Leave your vote

Continue Reading

Copyright © 2024 Breaking MN

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.