American homeowners have taken out more than 8 trillion dollars in mortgages; this is up an amazing 42 percent since the recession of 2001. By most this is considered “good” debt because homeowners are investing in appreciating things; and they get a tax break on any interest payments they make. The fast run up in home prices recently has made many homeowners feel like they’re wealthy; so they can run up day to day spending. However; millions of people across the country are taking advantage of low interest rates in refinance their mortgages, with as much as eighty percent taking on larger loans so they can cash out equity. Borrowing from home equity rose 715 billion dollars last year.
Why difference does it make? The more home equity homeowners tap out now, the less they’ll have for their retirement or in case of emergency.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
