Home Equity

 

What if:

• Paying off your mortgage with extra principal payments is wasting your home’s value?
  
• Using a 15 year mortgage or bi-weekly payment is not the fastest way to own your home “free and clear”?
  
• Your IRAs and 401(k)s are robbing you of retirement income?
  
• Much of what you’ve been taught about financial planning is flat-
  out wrong?

Home Equity:

• IS NOT LIQUID Let’s say for some reason you lose your job or become disabled. Recently Calloway Golf in San Diego announced it will be laying off many good folks from its Carlsbad facility. If you apply for a Home Equity Line of Credit or other mortgage what is the likelihood of being approved under those circumstances?….Slim to none. The lender only cares about your ability to make the next payment, even if you have faithfully been paying more than your minimum payment for years. It’s always better to have access to your equity and not need it than need it and not have access to it.
  
• IS NOT SAFE Consider Hurricane Katrina, the cliffs giving way in Laguna Beach or the fires of San Diego County. Those unfortunate people who had homes paid for or had some amount of equity tied up in their home, lost everything. Those who had their equity separated from their homes had much greater flexibility. They had more options and put their lives back together quicker and in a more dignified fashion. Our homes are meant to house families, not to store cash.
  
• EARNS A ZERO RATE OF RETURN Equity always has the same rate of return, ZERO. It doesn’t matter if your home is paid for or is mortgaged to the hilt, Home Equity never has a rate of return. You may want to consider separating your equity so it’s liquid and safe. We’re teaching people where appropriate to separate their equity and earn a return on it, just like your bank does with your money. Do you think you can get ahead by borrowing money at a certain rate (simple interest) and earning money at the same rate as what you’re borrowing at (compound interest)? You bet, let’s show you how.