Home Equity ? Is it Time to Cash Out and Move?

During the last five years, home prices have increased nationwide. In some parts of the country, notably California, home prices have doubled or even tripled. The median price of a home in the Los Angeles area is now nearly $450,000 and in the San Francisco area, the price is approaching $600,000. As the economy continues to improve, the price of housing continues to rise in California and elsewhere. Many people who have owned their homes for more than three years are suddenly finding themselves with hundreds of thousands of dollars in equity. Of course, equity is only a theoretical gain, and if the price of housing goes down, equity can go away. You only get to keep your equity as cash if you sell your home. Many homeowners are doing just that.

Home equity loans are increasingly popular these days, and many people with large amounts of equity in their homes are borrowing against it and using the money for home improvements, dream vacations or other luxury items. Others are simply cashing out and moving elsewhere. While prices on both coasts are rising at a breathtaking rate, price increases in most of the country are still more modest. A homeowner in California who bought a home five years ago for $200,000 may have a home worth $500,000 today. If that homeowner were to sell that home and move to Texas, or Iowa or even parts of Florida, he or she could buy a comparable or even larger home, pay cash, and probably keep a healthy profit to invest. For most Americans, the equity in their home is their single largest asset. Examining that equity to see if it can be used more wisely would be a sound move, particularly as real estate experts warn of a housing "bubble" that may soon reduce prices to more realistic levels. Should this "correction" in the market take place, homeowner equity could be seriously reduced.

Obviously, selling a home and moving just to pocket the equity is not something that suits everyone. While it may make sense from a financial standpoint, it will mean finding a new employer, finding a new home, finding new friends and moving children to new schools and friends. Anyone considering such a move would be well advised to carefully consider all of the ramifications of simply picking up and moving. On the other hand, the opportunity to extract several hundred thousand dollars in cash from a home is a rare one, and investing it wisely could go a long way towards financing a better lifestyle or a more comfortable retirement. Homeowners should be aware that there might be capital gains taxes to be paid on the sale of a home. Those considering selling their home to extract their equity would probably benefit from a consultation with a financial advisor.

©Copyright 2005 by Retro Marketing.

Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to debt consolidation information and HomeEquityHelp.net, a site devoted to information on home equity loans.

---

How to Find the Best Mortgage

The purchase of a new home is one of the... Read More

Refinance Your House

If you have seen all the advertisements regarding refinancing your... Read More

Residential Mortgage - Finding The Best Home Mortgage Lender

Most people approach the act of getting a home mortgage... Read More

Avoiding Foreclosure

If you fall behind in your mortgage payments, you face... Read More

Mortgage Cycling ? Brilliant or Risky

With mortgage rates near 20-year lows, competition in the mortgage... Read More

Composite Credit Report Score Simplifies Mortgage Issues

Do you want a mortgage loan for your new home?... Read More

Think You Cant Get a Mortgage?

You've finally found that dream home that you have always... Read More

Mortgage-Refinance Loan Measurment 101 -- Evaluate Your Own Ability to Pay

We live in a society where people are losing their... Read More

Home Loans For People With Bad Credit - When you Should Wait and When You Should Get a Home Loan

Home loans may seem like a bad idea for people... Read More

FHA Home Mortgage Purchase or Refinance Loan - Why You Might Consider Getting an FHA Loan

Most borrowers have heard of FHA home loans. They are... Read More

Who Else is Ready to have Their Money Work Harder for Them?

What does it mean to refinance? Why would anyone want... Read More

Thinking About Refinancing Your Loan?

Refinancing your home or property is a big decision that... Read More

Mortgage After Bankruptcy

Most people probably assume that obtaining a mortgage to purchase... Read More

California Refinance - Refinancing in California

The real estate market in California is booming. Home values... Read More

Home Equity Loan ? Still a Better Idea Than a 401(K) Loan

Anyone who borrows money is always looking for the cheapest... Read More

Buying a Home With Bad Credit - Get Approved With a Recent Bankruptcy or Foreclosure

A few years ago, if you had a bankruptcy or... Read More

The Truth About Shopping for Mortgage Rates

With so much lender advertising focusing just on rates, you... Read More

Reverse Mortgage Maximization

Have your home's appreciation grow twice as fast.For Seniors over... Read More

Benefits of a Remortgage

There are many benefits in choosing a remortgage, some of... Read More

What Exactly is a Mortgage Broker and How Can He/She Help You Save Thousands on Your Mortgage?

Have you ever heard of a mortgage broker before? If... Read More

What is a Homeowner Loan?

If you are a homeowner, it couldn't be easier to... Read More

Low Income Home Loans - FHA and VA Mortgage Loans Can Help You Get Approved

If you have low income and are looking to get... Read More

Mortgage Research Good News for House Buyers

Figures from the Council of Mortgage Lenders show that in... Read More

How easy is it to get a Commercial Mortgage in the UK?

As is the case when applying for any mortgage, be... Read More

How Not To Be Ripped Off By Mortgage Brokers

One of the things that bothers me about the mortgage... Read More

Home Equity Line of Credit ? Great Idea for Rainy Day Emergencies

Most Americans tend to live on a paycheck-to-paycheck basis, and... Read More

Home Loan Applications Made Easy

You have finally found the home of your dreams. You... Read More

How to Get Cheap Home Loans with a Bad Credit

It's been years since you made any major improvements to... Read More

Real Estate Finance Strategy that Few People Consider

If you are considering a new home loan anytime soon,... Read More

Home Equity Loans Company ? 7 Key Questions to Help You Choose One

Choosing the right home equity loan can be tricky; you... Read More

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit

Have you decided to refinance your home or apply for... Read More

Where To Find The Best Rates For Your Mortgage?

As with all of my articles this will be based... Read More

Home Equity Loans ? Research Your Lender Carefully

Real estate prices are rising across the country, and Americans... Read More