Velocity Finance - Home Equity

Home Equity

For the fiscal year ending September 30, 2004, home prices rose throughout the United States an average of 12.97%.That means a home purchased September 30, 2003 for $300,000 was worth - on average - $338,910 a year later, and that difference is entirelyhome equity for the home buyer. Almost $40,000 - not too shabby for doing absolutely nothing but sitting around owning your own home.

So you have home equity - what next?

The home equity houses are simply accumulating today at incredible rates can be used to your advantage when you sell your home or right now:

home equity is the difference between the value of your home and how much left you have in mortgage obligations - if you own the house outright and you decide to sell you will get the entire value of the home. Increasing home prices means you will actually make money off your home investment, and when appreciation rates are at such high levels owning a home is equivalent to a full time income!
Or, you can take that increased home value and put it to good use with home equity loans - second mortgages where you can use the money for absolutely anything.

While the money from a home equity loan or home equity line of credit is absolutely yours to spend as you choose, there are better ways to spend your home equity, and some ways that will be simply a waste.

Avoid wasting your home equity

As with all home loans, if you expect to succeed you have to be constantly working at your financial obligations, and you have to consider the entire situation before you take out any loan. Buying a home you cannot afford just because you qualify isn't a good idea, and neither is taking out a home improvement loan just because equity is there. At VelocityFinance we have a rule with home equity finance that always works - your home equity loans must either make you money, or save you money.