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Mortgage Refinancing: Taking Advantage of Your Home Equity
By Gabriel Traverso
CMR Columnist
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Many homeowners are growing more and more concerned about home values today and are uncertain about whether or not now is a good time to refinance--after all, what if home prices fall?
Is Getting a Home Equity Loan The Right Move?
It is widely agreed upon that the housing boom we've seen over the past few years has come to an end for now. In many areas of the country values have stabilized to the point of appearing to flatline. In some areas prices have even declined. Sometimes home prices go up in huge leaps and sometimes they decline. This is normal.
Look at the Facts
Last month the Washington Post reported that home prices jumped a staggering 80%, in inflation adjusted dollars, between 2000 and 2006. These numbers have never been seen before and some might say that such increases are impossible to sustain. That might be true, but the market is fluid and has a life of its own. Values rose by 43% in the 1970s but only went up 8.2% in the 1980s. In 1990, according to the U.S. Census, the median Californian home value was $249,800 -- more than double the national average. In 2000 the California median dropped to $211,500, still almost double the national median home price.
Investigate Your Home Equity Loan Options
Home prices will always fluctuate. Don't be afraid to take advantage of the equity you have simply because of what you read in the papers. Take the time to investigate your home equity loan or mortgage refinance options and research home values in your area. Weigh what you learn against your intentions regarding your home. If you plan to stay in your home for the next five or ten years, then what's happening now plays only a small role. Don't let fear and uncertainty prevent you from enjoying the equity you've earned in your home.
Sources
U.S. Census
The Washington Post: Soft Peddling in the Housing Market Blues
About the Author
Gabriel Traverso is a freelance writer, professional musician, and artist. He resides with his family in Reno, NV.
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