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HOME EQUITY MONEY MYTHS
Your home can be a great investment. However, given the nature of how we view our home and home equity, we are not optimizing this asset. The key to financial independence is to unlock your home equity and leverage it into a wealth-building, wealth-enhancing tool. The rules of wealth creation have changed along with conventional wisdom regarding home equity. How knowledgeable are you in the techniques of managing and leveraging your home equity? Take this true/false quiz and find out! True or False: The best way to pay off a home early is to pay extra principle on your mortgage. False. Actually, not paying extra principle payments is the wisest and the quickest way to accomplish financial independence. True or False: Home equity is liquid. False. When you need it most, you may not have it. Home equity is usually non-liquid. True or False: Home equity is a safe investment. False. A home mortgaged to the hilt or totally free and clear provides the greatest safety for the homeowner. True or False: Homes with a lot of equity are less subject to foreclosure. False. Homes with substantial equity are usually the first ones mortgage bankers foreclose on if their mortgages become delinquent. True of False: Home equity has a rate of return. False. Equity grows as a function of real estate appreciation and mortgage reduction; however, equity has zero rate of return. True or False: Mortgage interest is an expense that should be eliminated as soon as possible. False. Eliminating mortgage interest expense through traditional methods eliminates one of your best partners in accumulating wealth and financial security. True or False: Any and all debt is undesirable. False. Some debt, when managed wisely, can be desirable. True or False: Lower mortgages, resulting in lower payments, mean lower costs. False. If you take opportunity cost into consideration, low mortgage-to-home value ratios create tremendous hidden costs that increase the time needed to pay off a mortgage. True or False: Borrowing funds at a particular interest rate, then investing them at the same or lower interest rate, holds no potential growth returns. False. You can earn a tremendous profit, regardless of the relative interest rates, by positioning your money in a tax-free interest-compounding investment that earns a return greater than the real net costs of obtaining that money. True or False: Equity in your home enhances your net worth. False. Equity in your home does not enhance your net worth at all. Separated from your home, however, it has the ability to dramatically enhance your net worth over time. True or False: The amount of equity you have in your home has no bearing on how marketable it is. False. Your home may likely sell much more quickly and for a higher price if it has a high mortgage balance (low equity) rather than a low mortgage or no mortgage balance (high equity), especially in soft real estate markets. Put the lazy, idle dollars trapped in your home to work safely and reap as much as an extra million. We can help you optimize all of your assets and achieve your goals. Opportunity is knocking. You just have to answer the door. Contact me for a free analysis of your home investment to increase your safety, retirement, and wealth creation. Success Stories “In just over 45 days by leveraging the money I was already spending, I went from struggling to keep up with my house, car and credit card payments to owning two homes, and a positive cash flow of $580 a month to put toward my retirement. Thank you.” - Martha I look forward to hearing from you! |
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