Mortgage equity withdrawal
We'll be talking about mortgage equity withdrawal during this post and when to refinance and the good and bad reasons for taking equity out of your house. When I read Noah Rosenblatt's article, I noted one good reason to take equity out of your home was to apply toward renovations.
Noah says, "especially in kitchens, baths and floors, (renovations) get back most if not more of the overall expense at resale. So, why not do it earlier giving you time to enjoy the new work."
That point was especially interesting to me because I just talked with an individual who is going to spend significant money to upgrade his current house in those 3 exact areas in preparation for listing and selling his house upon completion of the work. And while I'm sure that the house will look great and he'll get even more than he is spending to update, I was thinking about how many others spend money to get their home ready for sale and never truly get to enjoy the updates other than during the brief (hopefully) listing period.
So if you plan on staying in your home for the next few years and you're looking around at carpeting that's a little long in the tooth or you'd really like an updated kitchen or bath and you have the money to do something now, go ahead and renovate, remodel, redecorate and enjoy!
One of the brightest and best in the blogosphere is Noah Rosenblatt of Urban Digs. While you might not think that the New York City real estate market has anything to do with what is happening in real estate anywhere else in the country, one of the best things about Noah's writing is how universal his posts often are.
"Cashing out equity in your home is something that I always wanted to discuss here on UrbanDigs, because a lot of the times it is done for all the wrong reasons, and worth a brief discussion".
Noah discusses when to refinance and what the good and bad reasons are for taking equity out of your home.
Please read Using Your Home as an ATM.