Seriously, did you refinance your house?
And buy a car?
To begin with, I got no pride when it comes to my ride. Not that I don't take care of my vehicles, I do. However, my desire for cash on hand or cash for investments has been stronger than the allure of any vehicle I've ever seen. I recognize this isn't true for everyone. Too many, actually.
I'm not going to count the times I've heard "We refinanced and took some money out of the house". This is frequently following the part of the conversation where I am showing a couple what the market value is for their home and they are realizing that the new mortgage is much higher than the new market value.
Was I talking to you?
So the problem is that many people now are missing incredible buying opportunities because they are deciding to stay in the current house until the market improves. They don't want the commute, they don't want the upkeep, they want a larger home, they want a smaller home, whatever - they really do want to move. But they're not going to because they are not going to have any cash left over from the sale of their current home.
And they're waiting for the market to improve the price of their home. Do you see the problem with this logic?
Any market that improves your home's value, improves (raises) the value of the home you will be buying. For the most part, rule-of-thumb, if it's helping you, it's helping everyone.
And what about that new car? I trust the theory, if it puts cash in your pocket, it's an asset; If it takes cash out of your pocket, it's a liability. It is hard for me not to shake my head here. You're driving around in your equity from your house and you're not going to sell and get a home that was selling for $50,000 or $100,000 more two years ago than it is now, because you won't have cash out of the current market? Please, sell the fancy car and use it towards the purchase of the home you really want. Don't put your happiness on hold for a depreciating liability!
And in the next boom-market, don't refinance your home to buy a car, a truck, a vacation! If you ever take the equity out of your home, use it only for life-and-death emergencies OR to buy ASSETS. Cars are not assets, unless of course you're Greg Biffle, and that's another story....
Need help determining if you really should sell? I can guide you through the important questions so you know the best move for you, now. Call me today.
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