Your Mortgage is Never Too Small….Don’t Become a Victim !
July 24th, 2007 categories: San Diego Real Estate
With all of todays multimedia advertising encouraging homeowners to maximize their loans so they can use their equity for any number of tempting reasons, puts many homeowners in peril.
In my estimation, this sort of marketing is creating more home debt than should ever be considered by most homeowners.
The ads contention that you should always have the largest mortgage possible is so risky, many homeowners in the recent past and those tempted to cash out their equity are making foolish decisions that could haunt them for a very long time.
These marketing ads are very tempting, suggesting that these refinance loans free up money for that past dues vacation, a new family car,buying cash value life insurance and any sundry of other things you have avoided while trying to build the financial security for you and your family.
Dont think of your home as your cash cow. Before ever seriously considering pulling out the equity from your home, please get some advise from qualified professionals. 
Falling to do so could create a great deal of unneeded stress. Keep your equity in place and dont be tempted by it. Learn to recognize it as what it is. A reserve in dire emergencies and a larger share of earned ownership. Keep it as your nest egg for the future. If you sacrifice this equity on the temptation that your life will be better with a lot more of what you really dont need, it could end up costing your home. Particularly if tragedy or misfortune strikes, and that would be an even greater tragedy.
Naturally there are exceptions but the homeowners most likely to respond to these ads are the ones that shouldnt be responding. If If you are investing your equity as part of a good financial plan, carefully monitored by other professionals, you may be the exception.
Your mortage is never too small…not having one at all is a worthy goal.
William,
Smart advice here and I’m in full agreement with with one. All too often people use their home like a checkbook, spending their equity, thinking it will continue to grow each and every day. Every now and then when we have a market change too many find themselves “upside down”.
Thanks for the great article!
I think that as the property values continue to decline, the lenders will tighten their lending for home equity loans as well. Borrowers can no longer bet on the quick appreciation that will “pay off” their loans.