Home Equity
Matt Seinberg

Every homeowner shares a dream. He or she wants to be above water with his or her mortgage. They want to pay it off, in a timely manner, without getting behind. I know a couple of people that are so under water with their mortgages they stopped paying it altogether, and are pretty much living for free in a home they don't own.

The banks are paying the taxes and insurance, while the soon to be ex-owner is paying all the utilities such as cable, electric, and gas. Sometimes the banks will agree to restructure or refinance the mortgage because they don't really want to own any more properties.

Many times the banks will just let these folks live there just to maintain the property. An occupied own is worth much more than an empty one, and an empty home just invites trouble. The chance of criminal activity happening in an empty home goes up, dramatically, as does the chance for other sorts of damage from neglect.

Having equity in a home gives a homeowner access to a credit line usable for most anything. Last year when we renovated the kitchen, I used some money, from our home equity line of credit, to help pay for it. Then I had a CD mature; I cashed that in and used it to pay back the home equity loan.

That particular home equity line is about to close its term after ten years, which means we have to go through the entire loan process all over again. I got that started a week or so ago, and Phillip at Citibank is a very thorough and persistent young man. He wants to get this done almost as quickly as I do.

On my last day off, he called me to see if I had filled out some paperwork, and insisted that I drop it off that day as well. Since the bank is only five minutes away, I decided to do it. He also gave me more papers to fill out. When the mail arrived later that day, the same paperwork from Citibank was there as well.

The important part for me is what the rate is going to be. Right now, it's 3.25%, and I'm hoping the new line will be about the same. I want to take some money out of whatever line will have the lower rate. This year our roof needs redoing. I'd like to remodel the bathroom, as well.

With Michelle going to college in the fall, it would be nice to have some flexibility with a line of credit to have extra cash on hand. She is going to get Marcy's 2001 Altima, and we're going to lease a new vehicle for Marcy. We're thinking about a small SUV like the Kia Sorrento, Mazda CX-5, Chevy Equinox or Ford Escape.

There have been to many times where I've needed to pick something up, move something or just have something a little bigger than a trunk to get a chore done. I had a neighbor that has since moved away, who used to help me haul things around with his trailer. Now if I need to bring the snow blower or power washer in for service, I can't. Neither one fits in a regular trunk.

In today's tough economic times, having good credit is essential. You get better bank loan terms, along with a certain piece of mind that you can pretty much do whatever you want to accumulate more debt or pay off debt.

I prefer to pay it off.