"It's On The House!"
It's a really fascinating time not only for real estate agents, but also real estate owners. Owners in their twenties and thirties have seen 100% appreciation in their homes in less than a couple of years while their parents saw a 1%/year increase for decades. Home equity loans are very popular these days, but is it so wise to spend this money on new cars, new houses, improvements, or travelling?I think borrowing against your house is the last thing you should do in order to finance luxuries, like new cars or travelling. If your financial situation changes and you cannot make your new payments, you've placed your house in jeopardy. Using home equity for improvements or a second home is still a risk, but it's a calculated risk that can pay off. In my opinion, your improvements should increase the value of your home but still keep your home within the price range of your neighborhood (don't put a $50K kitchen in a $200K townhouse). Buying a second home creates another opportunity for income, but you have to know whether you wish to rent or turn over the home, and the risks of each course of action. Feel free to contact me with any questions about these issues at inessa21@juno.com, and here's an article you may find interesting. (You need to register w/the Washington Post in order to view the article.)
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