Annie Jacobsen Does Write Other Stuff


Stop Sitting On Your Assets

If you own your home, ask yourself one question... Do I have a home equity line of credit? If the answer is no, it's time to run, not walk, to your favorite financial institution to discuss your options. If your home has appreciated in value since you bought it you're probably sitting on an untapped goldmine. By opening a line of credit using the equity in your home, you can consolidate debt, make home improvements, or just have a line of credit available in case you need it.



Mary Hunt has a different view:

...But first let`s get this home equity thing straight. That number whatever it is does NOT represent your money sitting in a bank somewhere just waiting for you to draw it out. It`s not money, it is a paper asset. And if you wish to have access to the equity there is a price to pay: You can either give up possession of the house or you find someone to lend you money using that equity as the collateral. If you insist on having access to your equity now while you still live in the house, you are creating a new debt. Many people simply do not understand that....

So before you so quickly look to the equity in your home as a pile of cash to which you are entitled and with which you could get rid of high-interest credit card debt or pay your bills if you lose your job, think about the potential consequences. That`s when I hope you will see that other alternatives should be considered. Like engaging in significant expense cutting for a while as a way of bringing your outgo in line with your income -- and I`m talking about cancelling the cable TV and all other optional expenses. Or sell assets as a way of coming up with the cash you need to get through a difficult time.

No matter what financial challenge you are facing right now or may in the future, more than likely it is temporary ... it will pass! But a home equity loan is permanent and a remedy that may be far too severe.