It cost me $171 per square foot to buy the waterfront property in the Colorado mountains.
The price-per-square-foot value of my home is nearly $293.
TAX SOFTWARE DEALS OF THE WEEK
It’s called being house-rich and cash-poor.
Many homeowners are in a similar situation, withplenty of home equity.
With mostHELOCs, you’ll have aset amount of timeto use the money before you enter a repayment period.
At that point, you’ll start making monthly payments (with interest) on the credit you used.
HELOC interest rates are typically lower than the current market credit card interest rates.
But unlike a credit card, a HELOC is secured by your personal property.
If you stop making payments on the HELOC, you’re atriskof losing your house.
Ahome equity loanis a loan secured by the accrued equity in a home.
Acash-out refinanceinvolvesrefinancing your home loan for morethan you owe on your current mortgage.
Requirements for a cash-out refinance:
Potential risks of a cash-out refinance:
What about term-based refinancing?
Homeowners with shorter-term loans (such as10-yearor15-year mortgageloans) who are cash-strapped might consider refinancing to a30-year mortgageloan.
When should you think about leveraging your home equity?
Experts advise againstusing your home equity to buy a big-ticket item that depreciates quickly, like a car.
“You end up risking your home’s equity for an asset that will be worth less.
“In a lot of major markets, the permitting process has become streamlined,” Dossey said.
Whatever your situation, experts recommend consulting with a financial advisor before leveraging your home equity to get cash.
“A professional can provide tailored advice based on individual financial situations,” said Bartlett.
