Refinance > Be Cautious When Using Your Nest Egg as an ATM

Be Cautious When Using Your Nest Egg as an ATM

by: James H. Dimmitt

About five years ago I moved from the ranks of being a renter to that of being a homeowner. Now, not a week goes by that I don?t receive some type of offer through the mail encouraging me to refinance my mortgage, open a home equity line of credit (HELOC), or apply for a home equity loan.

Payoff High Interest Credit Card Debt! Lower Your Monthly Payments! Buy A New Car! Refinance And Get Money Now! scream the slogans splashed across the envelopes.

The promotional letters inside point out how easy it will be for me to ?get the extra cash you need NOW!? They promise ?no out of pocket costs? with a newly refinanced 30-year loan.

Could I use some extra cash NOW? You bet I could! Who needs high interest credit card debt? Not me, no way, no how! Buy a new car? Hmmm, I like that new Pontiac G6 I?ve seen on tv, maybe in a sleek titanium color with black trim?

For thousands of U.S. households ?Home Sweet Home? is rapidly being replaced with a new sentiment - ?Home Sweet ATM.? According to the latest Federal Reserve study, 45% of homeowners who have refinanced their mortgages pulled cash out and 74% wound up lengthening their mortgage by about six years. Only 17% shortened their loan term opting to downsize to a 15-year mortgage.

In a period of six years, Americans have more than doubled the amount owed on home equity loans and lines of credit, nearing $766.2 billion, according to the Federal Reserve.

If you?re in your 40?s and you refinance on a new 30-yr. loan, you?ll be in your 70?s by the time your loan ends. Even if you shave off a few years by paying down your principle, you?re still risking not owning your home ?free and clear? as you approach retirement age.

What happened to the era when your home was considered your nest egg to be used only for life-threatening or life-changing events like paying for a child?s wedding or for a medical emergency? And worst of all, many new homeowners are using their home?s equity as another source for financing new debts.

Think twice before using home equity to pay off credit card balances. If you?re already overspending on your credit cards now, what makes you think anything will be different after you pay them off with a loan or line of credit? Many people just wind up deeper in debt or facing bankruptcy because they couldn?t resist charging their cards up again.

Keep this in mind before tapping your home?s equity - Your loan or HELOC is secured by your home. Default on the loan and you could lose your house, even if you declare bankruptcy!

The best use for home equity is to make improvements that add value to your home. Remodeling a kitchen or bathroom, adding an extra room or creating a master suite are just a few of the ?hot? improvements that can really pay off when it comes time for you to sell.

If your home truly is your nest egg, be smart about how use its equity. Make sure that it fits in with your overall financial plan and golas. Otherwise, you could be left without a nest and just the egg!

About The Author

Author: James H. Dimmitt

James is editor of "TO YOUR CREDIT", a free weekly newsletter with tips to help you manage your personal finances. Subscribe today and receive his e-book ?IDENTITY THEFT- How To Avoid Becoming the Next Victim!? and other free bonuses by visiting http://www.yourfreecreditreportnow.com

Refinancing After Bankruptcy - Tips On Refinancing Your Home Mortgage After A Bankruptcy

Refinancing After Bankruptcy - Tips On Refinancing Your Home Mortgage After A Bankruptcy

by: Carrie Reeder

Have you filed bankruptcy since you bought your home? Are you now looking to take advantage of lower interest rates by refinancing your home? You will probably soon realize how much more difficult it is to finance or refinance a home after a recent bankruptcy. It is not impossible though. There are many companies online that will help you refinance your home.

Here are some tips to consider when refinancing after a bankruptcy:

Even though interest rates have dropped, you may not be able to get a lower interest rate than when you bought initially - If you had decent or good credit when you bought your home originally, even though interest rates have lowered recently, you may not be able to qualify for an interest rate any lower than you had when you bought your home originally. With a recent bankruptcy, your interest rate is going to...

Refinancing After Bankruptcy - Tips On Refinancing Your Home Mortgage After A Bankruptcy

Refinance > Refinancing After Bankruptcy - Tips On Refinancing Your Home Mortgage After A Bankruptcy

Bad Credit Auto Loan Refinance - Bad Credit Auto Refinance Tips

Bad Credit Auto Loan Refinance - Bad Credit Auto Refinance Tips

by: Carrie Reeder

Most people know that it is possible to refinance their homes but did you know it is also possible to refinance your auto? Indeed for many people who have high interest sub prime car loans, refinancing their auto loans may be a wise decision. How do you know when refinancing your bad credit auto loan might be a good idea? And once you have decided to refinance, how should you go about doing it so that you actually improve your loan situation?

Just as when you refinance your home loan, when you refinance your auto loan the old loan is paid off in full and it is replaced by a new loan. If when you bought your car your credit score was below 620, the interest rate on your auto loan may be significantly above the interest rate you can qualify for today. By refinancing your bad credit auto loan the monthly payment may go down substantially. Also, over the life of the...

Bad Credit Auto Loan Refinance - Bad Credit Auto Refinance Tips

Refinance > Bad Credit Auto Loan Refinance - Bad Credit Auto Refinance Tips

Deciding if the Time Is Right to Refinance

Deciding if the Time Is Right to Refinance

by: John Mussi

Choosing to refinance a loan can be a major decision, especially if that loan is a major loan such as a mortgage or automotive financing. If you refinance your loan too soon, you might end up doing more harm than good and not be able to do much to correct it? but if you wait you might end up missing out on a good deal that isn't likely to return.

Before you make the decision to refinance, you should take the time to make sure that you understand exactly what refinancing entails and should look at the various signs to determine whether or not the time is actually right for you to refinance your loan.

Below you'll find some basic information on what refinancing is as well as information that might help you to make the decision as to whether or not it's the right time to take that step.

What Refinancing Is

Though the name may suggest that refinancing a loan is simply...

Deciding if the Time Is Right to Refinance

Refinance > Deciding if the Time Is Right to Refinance

Ask the Expert: When do I Refinance My Home?

by: Jay Popejoy

Home refinancing is a wonderful financial tool for homeowners to use for debt management to investments. If the home refinance is used correctly, wisely, and at the right time, the benefits from the refinance can improve the financial picture of the homeowner. There is no cookie cutter approach to refinancing. Each individual or family has their own unique set of circumstances. Here are some common questions homeowners often ask when they are considering refinancing.

What is the most critical question to ask myself when refinancing a home?

Is refinancing going to put you in a better position financially? Will refinancing reduce your monthly expenses, meet a critical family requirement, or improve your investment portfolio? If the answer is yes, it is probably a good time to refinance.

What is a cost benefit analysis?

This is a detailed account of the actual cost of...

Ask the Expert: When do I Refinance My Home?

Refinance > Ask the Expert: When do I Refinance My Home?

Finding a Mortgage Refinance Advisor

Finding a Mortgage Refinance Advisor

by: Jennifer Hershey

If you are looking to refinance your home for a lower rate, or you are interested in a refinance with cash out to do some home repairs, buy a new car, etc., you may want to consider finding a mortgage refinance advisor.

There are actually two ways you can go about refinancing your home. The first would be to do the shopping around for a refinance on your own. The second way would be to locate a mortgage refinance advisor.

A mortgage refinance advisor. Otherwise, known as a mortgage loan officer or mortgage broker are not at all hard to find.

The internet is perhaps the best resource for tracking down a mortgage refinance advisor. There are literally hundreds of them right in your own back yard, and the internet would be by far the best way to begin your search.

Once you have found a mortgage refinance advisor, don?t stop there, shop around. By shopping around with a...

Finding a Mortgage Refinance Advisor

Refinance > Finding a Mortgage Refinance Advisor