Lenders and banks recommend home equity loans and refinancing early and often. These are the same institutions that got bailed out while millions lost their homes.
Using home equity as a source of cash isn’t a bad thing. Especially when the money is used for a new roof or for that boiler you have always wanted. The interest rates are usually more favorable than they are on other types of loans and for some there is a mortgage interest tax deduction.
There are also numerous advantages in not borrowing money that should also be explored before withdrawing money from the bank of home equity. For example a home can be sold and there can be money from the proceeds to use to buy another home.
It is also possible to own a home free and clear and enjoy a mortgage free retirement on that fixed income.
You would be amazed at how liberating it is to have no mortgage, car payments, student loan debt or credit card debt to pay down each month. Yet at the same time knowing that if you need money you can borrow against your home.
Maybe I just have the post housing crash jitters. . . but please borrow responsibly. It doesn’t seem like the banks suffered because they lent money to people who could not pay it back but many former home owners did and still are.
