After being underwater on my mortgage for several years, the last thing I wanted to do after building up equity in my house was go out and get a home equity line of credit. According to a recent article by Bloomberg, rising property values are fueling a home equity loan comeback. The demand for Helocs declined for six years, probably because a lot of people had zero or negative equity in their homes. The lending for Helocs rose 30 percent this year and is expected to rise another 31 percent to $104 billion.
Saving for higher taxes
Some people are taking out home equity loans because the values of their homes have bone up. Experts say housing prices went up about 8 percent this year. However, I am thinking about the higher property tax bills that come with increased home values. I don't want to be stuck paying back a Heloc in addition to owing more property taxes. I based my savings on the highest amount of property taxes we paid during the housing bubble. As long as I have the difference between the higher property taxes and our current property taxes in savings, I know I'll be able to weather the imminent hike in my mortgage payment.
Boosting the economy
I know that the economy gets a big boost when people spend more money. However, I can still be a consumer without getting into debt. I don't like the idea of having to sell my home in order to pay off my Heloc in an emergency situation. I'd rather pay down my mortgage so the other thing I have to worry about is the taxes and insurance. It seems to me that taking out a Heloc would put me in a shaky financial situation when the economy is already uncertain.
Tapping equity to buy stuff
I would rather maintain a more minimalist lifestyle than tap my home equity. Even though the value of our home has not completely recovered, a Realtor told me homes such as mine are being appraised at about $150,000. Since we owe about $100,000, we could potentially use our equity for various purchases. According to the Bloomberg article, from 2013 to 2014, a lot of Americans used their home equity to purchase everything from cars and televisions to cruises as well as home renovations and repairs. My husband and I would rather keep saving money in a home maintenance fund. Once our home is paid off, we will have plenty of extra money for renovations as well as vacations.
Even though I don't intend to obtain a Heloc, I believe the statistics that show many people are using Helocs, especially for home renovations. I can see some wisdom in investing in home-improvement retailers. It's becoming evident Americans are back to spending. Since many banks require people to take out a minimum of $10,000 or $25,000 for a Heloc, many people almost feel motivated to spend rather than save. To me, it's a vicious cycle that ends in a debt trap. I'm surprised that Americans aren't more cautious about their homes after the major housing crisis.
Saving for higher taxes
Some people are taking out home equity loans because the values of their homes have bone up. Experts say housing prices went up about 8 percent this year. However, I am thinking about the higher property tax bills that come with increased home values. I don't want to be stuck paying back a Heloc in addition to owing more property taxes. I based my savings on the highest amount of property taxes we paid during the housing bubble. As long as I have the difference between the higher property taxes and our current property taxes in savings, I know I'll be able to weather the imminent hike in my mortgage payment.
Boosting the economy
I know that the economy gets a big boost when people spend more money. However, I can still be a consumer without getting into debt. I don't like the idea of having to sell my home in order to pay off my Heloc in an emergency situation. I'd rather pay down my mortgage so the other thing I have to worry about is the taxes and insurance. It seems to me that taking out a Heloc would put me in a shaky financial situation when the economy is already uncertain.
Tapping equity to buy stuff
I would rather maintain a more minimalist lifestyle than tap my home equity. Even though the value of our home has not completely recovered, a Realtor told me homes such as mine are being appraised at about $150,000. Since we owe about $100,000, we could potentially use our equity for various purchases. According to the Bloomberg article, from 2013 to 2014, a lot of Americans used their home equity to purchase everything from cars and televisions to cruises as well as home renovations and repairs. My husband and I would rather keep saving money in a home maintenance fund. Once our home is paid off, we will have plenty of extra money for renovations as well as vacations.
Even though I don't intend to obtain a Heloc, I believe the statistics that show many people are using Helocs, especially for home renovations. I can see some wisdom in investing in home-improvement retailers. It's becoming evident Americans are back to spending. Since many banks require people to take out a minimum of $10,000 or $25,000 for a Heloc, many people almost feel motivated to spend rather than save. To me, it's a vicious cycle that ends in a debt trap. I'm surprised that Americans aren't more cautious about their homes after the major housing crisis.
