 |
Further
Reading ...
|
|
Start a Home Based Business - Darrell Knox
What would it be like to start a home based business? Many people wonder this on Sundays as they dread the beginning of the next work week. The only real problem, and what prevents most people from starting a home based business, is belief that...
Literally Littered with Illiteracy - Stephen Brennan
There’s some ‘alliteration’ for you! My great concern though, is the fact that there are too many today who wouldn’t understand the title or know the meaning of ‘alliteration’ (a repetition of words beginning with the same letter – as in Peter...
How To Find Ideas For Creating Your Own Profitable Products - Charles Kangethe
(c) 2004 Charles Kangethe In this Article we look at the third competitive advantage of successful Internet Marketers - Creating Products. The main problem with creating products is not in the build process, but rather in the "Ideas Process."...
Tips and Tricks for Last Minute Business Trips - Smooth Hound
Copyright 2005 Smooth Hound Business trips can often take place at the last minute. Something crops up that just absolutely has to be sorted out face to face. Which means if your job could potentially involve business travel, it’s essential to be...
|
|
|
Be Cautious When Using Your Nest Egg as an ATM
|
 |
Written By:
James H. Dimmitt
|
|
|
About five years ago I moved from the ranks of being a renter to that of being a homeowner. Now, not a week goes by that I don’t receive some type of offer through the mail encouraging me to refinance my mortgage, open a home equity line of credit (HELOC), or apply for a home equity loan.
Payoff High Interest Credit Card Debt! Lower Your Monthly Payments! Buy A New Car! Refinance And Get Money Now! scream the slogans splashed across the envelopes.
The promotional letters inside point out how easy it will be for me to “get the extra cash you need NOW!” They promise “no out of pocket costs” with a newly refinanced 30-year loan.
Could I use some extra cash NOW? You bet I could! Who needs high interest credit card debt? Not me, no way, no how! Buy a new car? Hmmm, I like that new Pontiac G6 I’ve seen on tv, maybe in a sleek titanium color with black trim?
For thousands of U.S. households “Home Sweet Home” is rapidly being replaced with a new sentiment - “Home Sweet ATM.” According to the latest Federal Reserve study, 45% of homeowners who have refinanced their mortgages pulled cash out and 74% wound up lengthening their mortgage by about six years. Only 17% shortened their loan term opting to downsize to a 15-year mortgage.
In a period of six years, Americans have more than doubled the amount owed on home equity loans and lines of credit, nearing $766.2 billion, according to the Federal Reserve.
If you’re in your 40’s and you refinance on a new 30-yr. loan, you’ll be in your 70’s by the time your loan ends. Even if you shave off a few years by paying down your principle, you’re still risking not owning your home “free and clear” as you approach retirement age.
What happened to the era when your home was considered your nest egg to be used - continued below ...
|
|
|
continued ...
only for life-threatening or life-changing events like paying for a child’s wedding or for a medical emergency? And worst of all, many new homeowners are using their home’s equity as another source for financing new debts.
Think twice before using home equity to pay off credit card balances. If you’re already overspending on your credit cards now, what makes you think anything will be different after you pay them off with a loan or line of credit? Many people just wind up deeper in debt or facing bankruptcy because they couldn’t resist charging their cards up again.
Keep this in mind before tapping your home’s equity - Your loan or HELOC is secured by your home. Default on the loan and you could lose your house, even if you declare bankruptcy!
The best use for home equity is to make improvements that add value to your home. Remodeling a kitchen or bathroom, adding an extra room or creating a master suite are just a few of the “hot” improvements that can really pay off when it comes time for you to sell.
If your home truly is your nest egg, be smart about how use its equity. Make sure that it fits in with your overall financial plan and golas. Otherwise, you could be left without a nest and just the egg!
About the Author
************************************************************
© 2005, www.yourfreecreditreportnow.com
Author: James H. Dimmitt
James is editor of "TO YOUR CREDIT", a free weekly newsletter with tips to help you manage your personal finances. Subscribe today and receive his e-book “IDENTITY THEFT- How To Avoid Becoming the Next Victim!” and other free bonuses by visiting
http://www.yourfreecreditreportnow.com
|
|
|
|
 |
|
|
| _Additional Resources ... |
|
Creating Time the Virtual Way: How Virtual Assistants are simplifying life for small business owners - Danielle Keister The Relief
Virtual Assistants are taking on those time-consuming administrative chores and special projects, and giving business owners more breathing room to grow, succeed and fall in love with their business again. -------------------- Time. As a small...
A Big Tax Loophole Just Got Bigger - Wayne M Davies
Believe it or not, there are ways to convert taxable income into non-taxable income, without any fear of an IRS audit. Here's one of my favorites. It's been part of our beloved tax code for over 30 years, yet many still don't take advantage of it. ...
Classified Ads - What Works & What Doesn’t - Diana Barnum
Do classified ads really work? Should you include an email address or fax number in them? How about a call to action? Questions like these are often brought to the attention of OhioHelp.net , an Ohio-based company specializing in helping...
|
|
|
|
|
|
|
|
|
|
