I've talked before about the importance of owning property. Whether you live in the place you own, or you're renting it out, it's nice to have your monthly rent payment going towards something rather than "down the drain."
Aside from that psychological boost, there is a financial advantage to owning your own home. Obviously, you're increasing your net worth, but you are also eligible for a home equity loan.
Essentially, you're borrowing money against the value of your house. A home equity loan is generally used to pay off big purchases, like medical expenses, a college education, or a super nice car (?).
The interest rate is generally fair, at a little over prime. You must have a good credit rating, and the cash is delivered in a lump sum payment (very nice).
Alternatively, you can get a Home Equity Line of Credit (HELOC). This is similar to the home equity loan, in that you are also borrowing money against your house. However, rather than receiving a lump sum payment, the borrower is given a line of credit within which to work: it's pretty much like having a large credit card.
Abusing the Home Equity Line of Credit is often faulted as one of the reasons for the subprime mortgage crisis: essentially, people were exploiting this generous line of credit in order to buy less-than-important items, such as boats, cars, and prostitutes.
After the mortgage crisis in the United States, many American banks froze HELOC lending, as so many homes had been suddenly reduced in value. Banks like Chase are now facing lawsuits over this freeze.
To sum up, owning a home can be a lifesaver when you have to pay off medical bills or college tuition. It's nice to have the security of a large amount of collateral under your feet whenever the situation arises.
I don't know if you guys have heard about it yet or not, but Windows 8 is starting to look pretty cool. Don't get my wrong: I love u...
After my last post on debt consolidation, I received many e-mails asking me to provide a broad definition of debt consolidation. So today, i...
Single? Socially awkward? Ugly as fuck? Maybe you should consider finding your love online. According to a recent eHa...
So I've been trying out this little project the last couple days that I'm sure will interest you. Have you ever REALLY disliked one ...
With the public debates over health care still ongoing in the United States, it's clear that universal health insurance is a contested i...
I just heard of a tradition from Europe called Bastuloppet. The idea is that college girls and boys strip down and race through downtown c...
A lot of people would like a perfect degree, particularly those people who have experience in crappy, minimum-wage jobs. These individuals f...
Seems like some people have IRC channels going, which work a lot better. Anyways, I'll make this post about my possible changing minor...
I've talked before about the importance of owning property. Whether you live in the place you own, or you're renting it out, it'...
So I don't know what's wrong with my city, but when I checked my local Craigslist personal ads today, about 90% of the posts were fo...
- ▼ March (9)
Powered by Blogger.