Tapping into your equity, before its gone?

By
Mortgage and Lending with Mortgage officer

(Please practice responsible borrowing and financial planning, I am not suggesting irresponsible borrowing)

Just a thought, with the way the market is going and the valuations of homes possibly falling. I think it would be a wise idea to tap into the equity (no out of pocket closing costs) that is still available, and put this newly opened Line of Credit on the back burner, just in case. These Lines of Credit are still easily obtainable (and at no cost). You never know when you might need it and its easier to get money when you don't need it, then when things are tightening up.

I am suggecting this as a tool to supplement what you might have available as equity in the property. 90% Loan to value is the maximum that I am familiar with.

Comments (5)

Rebecca Savitski
BSR Real Estate Group - Cary, NC
NC Real Estate Listings

Why would you want to take equity that may not exist in the future? Wouldn't this really be negative equity?

Oct 26, 2007 04:39 AM
Tina Thimlar
Century 21 - Saint Marys, GA
Southeast Georgia Real Estate
I strongly disagree with this advice seeing how we are feeling the effects of this already. People bought homes in 2005 that really weren't worth what the market was getting for them and now the property values have declined and are still declining and the home isn't worth what they owe on it! All those lenders out there doing 120% loans and the 100% loan interest only have just put these buyers in such a predicament that they can't even sell the house and break even. Alot of these people are overmortgaged now and can't see the light at the end of the tunnel. Are you a realtor or a mortgage broker??
Oct 26, 2007 04:42 AM
Keith Stoller
Keith Stoller Tax & Business Solutions - Bakersfield, CA
That's it, let's drive another nail into the financial coffin.  How about building equity through programs designed to pay off mortgages sooner.  We all seem to be latched into a mentality of borrowing to offset the need of saving for a rainy day and getting rid of our debts. We can learn a lot from the generations who have come before.
Oct 26, 2007 04:44 AM
Tina Thimlar
Century 21 - Saint Marys, GA
Southeast Georgia Real Estate
I totally agree with Keith! I'm glad I'm where I am.
Oct 26, 2007 04:45 AM
Douglas Bailey
Mortgage officer - Brandon, FL

To all,

I was not advocating "irresponsible borrowing" (I have since added this lable, thank you) I was only bringing up the possible use of an asset as an idea.

Thank you

Oct 26, 2007 05:01 AM