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 The economy has been good
to many homeowners, and with any luck, it will continue to do well. Yet
history has taught us that not everything goes according to plan. Too many
times we read about economic downturns in certain areas of the country.
For instance, take a look at California, Texas and the North East. There was a time when you couldn’t give your home away. Yet now, the demand for housing in those areas is strong. If you’ve lived through those times, then you’re probably prepared for the future. However, many new homeowners believe that their property will continue to increase in value year after year at the rate it is currently growing at. If this is you, then take a step back and consider the possibilities. With the recent trends in using home equity to pay off debt, many homeowners have tapped out their home’s equity. There is no doubt that deducting interest is better than having debt where you can’t deduct the interest. Never the less, this may be short-term thinking. Many lenders and real estate agents have reported that many of their clients cannot sell their properties because they owe more than what the home is worth. |
Some over extended their credit. Others had their credit extended by
unscrupulous lending practices. This means they borrowed more than their
home was worth on the assumption that real estate value would continue to
inflate. What is not considered is the possibility that one’s life situation could change. No one is able to predict illness, divorce, and loss of job or relocation. With any luck you won’t be a victim of circumstance. The question is whether or not you’re willing to risk your ability to sell your home should you need to. To protect yourself from this situation, keep close tabs on the market. This means reading the real estate section, checking for the sales price of the homes in your area, and watching the economy in your area. You can check the economy of the area by keeping tabs on layoffs and down sizing of corporations. The bottom line is to work with professionals that will not purposefully lead you into situations where they are the only ones to gain. I can assure you that I am that professional for you so please don’t hesitate to call me with any concerns. |
