|
Resort Property Search |
Home Equity Lines of Credit; Deadly Damage to Family Worth. copyright Jody Hudson 2007 Recently, I received an email about a TV ad; I don't watch TV but if you do watch TV, you may know of such things as this: There was a very professionally done TV Advertisement that was showing how everyone should re-finance their home and the AD had a big note at the end to go to Channel 101 for the rest of the story. There on channel 101 was a several minute commercial running over and over again showing dramatic examples as to why a couple should re- finance right away in order to pay for college for the kids, pay off old bills, pay off credit cards, get a new car, get new computers and a new big screen TV and there was even a dramatic story on why the couple should borrow money to put into investments or savings for their retirement! Such a loan is great for the lender but financially deadly for the borrower. This was a big city location and what also amazed this fellow, who sent me the email, was that this lender could afford to pay not only for the one minute regular commercial but also for an entire channel to run their dramatic five minute ad over and over again, about borrowing money on your home. I have also heard radio ads that made it sound like a person should use the equity in their home to buy non-investment things, pay off credit cards and otherwise use it like a large scale ATM. What is so amazing to the fellow who wrote me and also amazing to me is that there are so many people going for this deal that it pays for the lender to lease an entire channel in a metropolitan area to spew out this dangerously cruel and evil ad. It is difficult to build equity in a home. It is difficult to save for the down payment; difficult to keep up the payments sometimes, and it takes a long time to build equity. In the last few years, in our area and in most other areas of our country there has not been any increase in value of a home. The lender who pushes equity loans will often find a way to have the appraisal pushed up a few percentage points so that more equity can be shown where there may be less or none of what is shown on the loan as equity. The loan if obtained will remove or reduce what equity there is, and probably more. If such a couple has to sell – they can’t – they owe more than the home is worth. Please don't fall for this sort of thing. I hope you have not fallen for the trap of getting an equity loan in order to purchase consumer goods; that is things that are nice to have but which have little or much less resale value after you purchase them. If you have taken an equity loan or mortgage on your home; you should immediately do what you can, while you can, to pay off what you have borrowed. It is very possible that interest rates will climb again and they may climb a lot. If they do, home values may be stuck where they are for a few more years. If you have taken one of these Home Equity Lines of Credit; you may not have any equity in your home. You may also have a loan that will ride up in cost as interest rates climb. Many of the homes on the market today can not sell. The owners in far too many cases have taken Home Equity Lines of Credit on their homes in the last 5 years and if they have; they most likely don't have enough equity to sell their homes as they most likely owe more on the home than it is worth in today's market. They may be stuck and may not be able to sell their home for many more years. The home they bought as an investment may have turned into a financial prison. Jody Hudson, Realtor and Real Estate Agent Direct Line: cell - 302-542-4242 The Real Estate Broker that Jody works for; The Broker of Record is Virgil Brown. Virgil and his wife Nancy own Brown Real Estate Services, the company.
Jody is never, ever, in the office and takes no calls there.
Real Estate Broker: Brown Real Estate Services
|
