FOGGY VIEWS

I’m often asked by homeowners coming through my open houses, “How can I protect myself and my home’s equity”.     Below are a few suggestions to do just that:

1.  Lock in your mortgage interest rate - With rates at near-historic lows, now is the time to get a 30-year or 15-year fixed rate mortgage. 

2. Pay a little extra on your mortgage each month - apply that added amount to your loan principal, and your equity grows accordingly (it also reduces your total payout over the life of the loan).

3.  If you have an interest-only mortgage, start paying off some principle!

4.  Use your home equity wisely - Use equity to build your assets, and not as a ”credit card” to  ”borrow” against.  Conservatively, your equity should be only used to buy additional real estate, improve your current home, or buy more assets.  Be hesitant to use it to pay off credit cards, take a vacation, buy a car (I admit to being guilty of this!), or for regular day-to-day expenses.

5. And a final rule:  Build an Emergency Savings Account - Aim to have six months worth of housing and other expenses in the bank.   Nobody knows when they’ll be “dealt a curve ball”, but we all know people who have been!   As the boy scouts say:  “Be Prepared!”.