Home Equity - Is it Time to Cash Out and Move?During the last five years, home prices have increased nationwide. In some parts of the country, notably California, home prices have doubled or even tripled. The median price of a home in the Los Angeles area is now nearly $450,000 and in the San Francisco area, the price is approaching $600,000. As the economy continues to improve, the price of housing continues to rise in California and elsewhere. Many people who have owned their homes for more than three years are suddenly finding themselves with hundreds of thousands of dollars in equity. Of course, equity is only a theoretical gain, and if the price of housing goes down, equity can go away. You only get to keep your equity as cash if you sell your home. Many homeowners are doing just that. Home equity loans are increasingly popular these days, and many people with large amounts of equity in their homes are borrowing against it and using the money for home improvements, dream vacations or other luxury items. Others are simply cashing out and moving elsewhere. While prices on both coasts are rising at a breathtaking rate, price increases in most of the country are still more modest. A homeowner in California who bought a home five years ago for $200,000 may have a home worth $500,000 today. If that homeowner were to sell that home and move to Texas, or Iowa or even parts of Florida, he or she could buy a comparable or even larger home, pay cash, and probably keep a healthy profit to invest. For most Americans, the equity in their home is their single largest asset. Examining that equity to see if it can be used more wisely would be a sound move, particularly as real estate experts warn of a housing "bubble" that may soon reduce prices to more realistic levels. Should this "correction" in the market take place, homeowner equity could be seriously reduced. Obviously, selling a home and moving just to pocket the equity is not something that suits everyone. While it may make sense from a financial standpoint, it will mean finding a new employer, finding a new home, finding new friends and moving children to new schools and friends. Anyone considering such a move would be well advised to carefully consider all of the ramifications of simply picking up and moving. On the other hand, the opportunity to extract several hundred thousand dollars in cash from a home is a rare one, and investing it wisely could go a long way towards financing a better lifestyle or a more comfortable retirement. Homeowners should be aware that there might be capital gains taxes to be paid on the sale of a home. Those considering selling their home to extract their equity would probably benefit from a consultation with a financial advisor. ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.
MORE RESOURCES updated Tue. March / 19 / 2024 Pros And Cons Of Refinancing A Car Bankrate.com Current Student Loan Interest Rates in March 2024 Business Insider How to Refinance Your Mortgage NerdWallet Will Interest Rates Go Down in April 2024? | Mortgage Rates Forecast The Mortgage Reports When to Consider Refinancing Your Mortgage Business Insider Mortgage Relief and Mortgage Assistance Programs [2024 ] The Mortgage Reports Mortgage Rates This Week NerdWallet Mortgage Interest Rates Today, March 16, 2024 | Rates Tick up Business Insider Mortgage Interest Rates Today, March 14, 2024 | Rates Are Still on Track to Go Down This Year Business Insider Mortgage Interest Rates Today, March 17, 2024 | Sticky Inflation is Keeping Rates Up Business Insider Best Mortgage Refinance Lenders of March 2024 Business Insider Mortgage Interest Rates Today, March 13, 2024 | Rates Are Back Down Following Yesterday's CPI Report Business Insider Mortgage Rates Chart | Historical and Current Rate Trends The Mortgage Reports What Is An Interest-Only Mortgage? Bankrate.com Save up to $1,500 on a Mortgage Refinance With the New FHFA Program Business Insider How Soon Can You Refinance a Mortgage? NerdWallet Best Mortgage Refinance Lenders In 2024 Bankrate.com Mortgage Interest Rates Today, March 15, 2024 | Rates Drop for Second Week in a Row Business Insider Can You Refinance With No Income Verification in 2024? The Mortgage Reports Best Refinance Lenders of March 2024: Refinance Your Mortgage The Motley Fool Rates drop - Mortgage rates for March 11th, 2024 Bankrate.com Mortgage Rates Dip Below 7%. Recent Homeowners Race To Refinance. Realtor.com News Current mortgage refinance rates CNN Underscored When to Refinance Mortgage: Is it Time? - Buy Side from WSJ The Wall Street Journal Refinance Requirements: What You Need to Refinance Your Home in 2024 The Mortgage Reports Current 15-year refinance rates — and lenders that offer them CNN Underscored Conventional Refinance Rates and Guidelines for 2024 The Mortgage Reports How Soon Can You Refinance a Mortgage Loan? 2024 Rules The Mortgage Reports The best mortgage lenders for refinancing in March 2024 CNN Underscored How To Refinance An Underwater Mortgage Bankrate.com Mortgage Rate Forecast February 2024 Bankrate.com Mortgage Interest Rates Today, March 12, 2024 | Rates Are Down, and They May Drop Further in the Coming Months Business Insider Will Mortgage Rates Go Down in 2024? What Homebuyers Should Expect Business Insider What Credit Score Do I Need To Refinance? Bankrate.com Mortgage Applications Increase By 7.1% Amid Rate Drop, Refinance Activity Spikes National Mortgage Professional Office of Research blog: A look at cash-out refinance mortgages and their borrowers between 2013 to 2023 Consumer Financial Protection Bureau 30-year refinance rates: What to know CNN Underscored Should I Refinance My Mortgage Now? When to Refinance As Rates Drop Business Insider CFPB Releases Study of Refinance Mortgage Loans Between 2013 and 2023 Consumer Finance Monitor Should You Refinance Halfway Through Your Mortgage? Bankrate.com How To Get The Best Refinance Rate Bankrate.com The Sales Pitch for an 8% Mortgage: Buy Now, Refinance Later—for Free The Wall Street Journal Mortgage Interest Rates Today, March 11, 2024 | Rates Are Down. But High Inflation Could Send Them Back Up. Business Insider The Great Pandemic Mortgage Refinance Boom - Liberty Street Economics Liberty Street Economics - MBA: Mortgage Applications Increased in Weekly Survey Calculated Risk
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