Home Equity – Foreclosure Often Not Necessary in Current MarketWritten by Charles Essmeier
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While losing a home due to lack of payment is generally financially catastrophic for homeowners, current market has offered many financially troubled homeowners a simple way out – they can sell home.
The price of homes nationwide has skyrocketed in last few years, and in many markets, values have doubled or ever tripled. Many homeowners now have huge amounts of equity in their homes and that equity often exceeds amount owed on primary mortgage. That may be little consolation to a homeowner who has just lost his or her job, but homeowner now has another option besides watching bank sell home from under their feet. The homeowner can now sell home, pay off mortgage and often pocket some cash at same time. In most markets, this can be accomplished rather quickly, before foreclosure proceedings take place. The debtor will no longer have a place to live, but debt will be repaid, and he or she will often have quite a bit of cash left over. This is certainly a better option than either dealing with a scammer or losing home to foreclosure.
Anyone with financial troubles that prevents them from making their house payments should consult with their lender first. Lenders aren’t really interested in removing people from their homes unless it’s absolutely necessary. Still, it is comforting to know that current market may provide a somewhat more attractive alternative that may actually yield some cash.
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation and credit counseling information and HomeEquityHelp.net, a site devoted to information on mortgages and home equity loans.
| | Home Equity – Don’t Spend it on Risky InvestmentsWritten by Charles Essmeier
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their equity, bought more property, borrowed against that equity, and repeated this process six, seven, ten or more times, attempting to build up an empire of rental property. It’s hard enough for most people to manage one mortgage, but some people who are caught up in “equity frenzy” are now managing ten or more of them! On surface, it may appear that these intrepid individuals are simply taking advantage of an opportunity, turning several hundred thousand dollars worth of equity into millions of dollars worth of rental property. On other hand, these “investors” may be inviting disaster.
As more and more people buy real estate on speculation, equilibrium of real estate market is affected. The additional competition among buyers, fueled by real estate speculators, is causing prices to go up even more. Eventually, market is going to peak. Buyers who need a home to actually live there can only pay so much for them before homes simply become unaffordable. And not every speculator can own ten rental properties, as market can only support so many rental properties before market becomes saturated. Once that happens, prices will fall. And when they do, all of these buyers who purchased their homes using their own home’s equity will find themselves under a mountain of debt.
It’s nice to have some equity in your home. It’s also nice to be able to borrow against that equity for home improvements or debt consolidation. Using your equity as though it was cash you can freely spend is dangerous, as many speculators will soon learn.
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation and credit counseling information and HomeEquityHelp.net, a site devoted to information on mortgages and home equity loans.
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