“That red burner is still hot. Once again don’t touch it….”
“Really? I know it was last time but….”
If you are one of the rare and wonderful folks who have a 6 month buffer in liquid cash, are fully funding your tax deferred retirement account as well as education funds for your kids ignore my commentary. Your home’s equity can be an excellent source, especially in this interest rate climate, of nearly free after tax capital to pursue other financial opportunities to expand your wealth. Go for it.
However, if you are not in this category than the short answer for most homeowners to the title of this article is “No”. If you have less than 20% equity in your home it is almost assuredly a no. The biggest reason? Life.
What if your career or family circumstances require you to relocate or change your type of housing? A low or no equity position can make this daunting. Emergencies happen. Wouldn’t it be nice to have your home equity as a fall back? And how about when your dream home comes on the market and you don’t want to miss out on it? It would surely be nice to have the equity to be able to make a quick move to seize on the opportunity (this scenario just happened with one of my clients).
Resist the temptation to use your homes equity as a credit card. That being said If you are thinking of using your equity to make needed capital and cosmetic improvements to your home that will add value and provide utility give me a call. I can help you understand which projects will do the most to add value to your homes.
It’s a good life.