Wealth Accumulation and Home Ownership
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By :
Ed McDonald
Submitted
2009-12-06 18:51:00 |
If you're like most American, your home is your is your biggest asset. Home ownership takes much more than making a few mortgage payments. You have to spend money on the maintenance and make other changes to keep in up to date and competitive in real estate market. Unfortunately, for some people, home is their only investment. Given the low appreciation rate of real estate in some areas, it is probably better to think of purchasing a home as buying shelter, not as an investment that you expect to rapidly appreciate (increase in value). Home equity, the dollar value of a home in excess of the mortgage owed on it, is considered an asset against which you can borrow. This strategy must be used with extreme caution, however; you could lose your home if you do not repay the amount borrowed. In recent times, growing number of people are using home equity loans to pay off credit card debts. This is a dangerous trend. Remember, if these people don't make fundamental changes in their spending habits, they will be in credit card debts again and this time they will have their homes on the line as well.
If you own a home, make sure you make responsible decisions to protect your investment. Home equity loans are easy but they can easily destroy your dream of homeownership. If you haven't saved much in your retirement funds, home is one of the assets that you could use to help you pay for your living and medical expenses in retirement. But if you lose it long before you reach retirement, you may not have much choice other than adding extra burden on your children and loved ones. On the other hand, if you don't own a home, it may be a good idea to look into your financial situation to check if you can afford a home.
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Article From Fiscalwealth | Personal Finances, Investment and Wealth Management
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