home equity

Best Way To Take Equity Out of Your House

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home equity refinance

One of the most frustrating things during my years as a financial planner was the number of people who insisted on paying their mortgage off early or adding extra principal to their mortgage payments and then, years later (or not) wanting to know the best way to take equity out of your house. Grrrr!!! If you’re not going to listen to me about the best place to invest extra money, or if you ended up with a ton of equity in your home thanks to rising home prices, or just living there for a decade or more, then listen to me now about the best way to take money out of your home equity. Take Money Out of Your Home’s Equity by Refinancing Usually, taking money out of your home equity by refinancing is dumb. However, with interest rates at historical lows, and lenders competing with each other, it is possible to take equity out of your home, lower your interest rate, and pay lower expenses, all without sticking you with a big loan that you have to pay back. Here is how it works. Let’s say you owe $300,000 on a house worth $500,000. You have $200,000 in equity. …

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Reverse Mortgages Scam or Legitimate Financial Tool?

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I’ve been getting questions about reverse mortgages lately. It’s not surprising. Reverse mortgages are one of those financial planning tools that are very useful for a specific purpose, and for specific people, that has, unfortunately, been sold aggressively to others. Not all reverse mortgages are scams, but you have to understand what you are getting from reverse mortgage lenders when you sign up. In other words, there is a lot more to a reverse mortgage than what you see on that television commercial or Facebook ad. What Is a Reverse Mortgage? Let’s start from the beginning so that we have a solid footing. What is a reverse mortgage? The most common way to explain reverse mortgages is to say that the definition of a reverse mortgage is when a reverse mortgage lender gives you a lump sum of money for the equity in your home and then gets the home when you die. However, this is a little bit deceptive in that there is more to it than that. Let’s look a little deeper to see what is really going on. First, let’s look at a regular mortgage, or a forward mortgage, if you will. With a traditional mortgage, a …

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Ah…the Fine Print

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houseofmoneyEver read a newspaper article where someone is suing a company for misleading them? The company always says something like “we disclosed all the information to the client” as their defense. Want to see it in action? Countrywide Home Loans recently sent a client some unsolicited mail (i.e. junk mail) in which they offered a No closing cot Refi! At the top in big letters on a stand-out blue background it says:

“Pay hundreds – or even thousands at closing

or PAY ZERO with Countrywide.

You Decide.”

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