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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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Right Homeowners Insurance Deductible

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Most property insurance works the same way. Therefore, if you understand your auto insurance, you understand a lot about your homeowners insurance, or house insurance. The basic moving parts of a homeowners policy are much the same as car insurance. There is a property insurance part in case something happens to your home, which is like the comprehensive or collision insurance part of your car insurance. There is a liability insurance component much like the liability part of your auto insurance. There is a premium that you have to pay in order to keep your coverage in both types of policies. And, finally, both types of insurance have a deductible, or an amount that you have to pay before your insurance kicks in. Understanding Homeowners Insurance Policies There is a thing about home insurance that some people don’t know. Insurance companies can sometimes cancel homeowners policies if there are too many claims filed for the insured property. In some cases, it only takes two or three claims over the years to get cancelled. And, almost all homeowners insurance claims lead to higher rates. Even worse, when you apply for insurance with a new company, one of the first questions is …

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