What is your opinion on refinancing your home? should one take out an equity loan and deposit it?
November 3, 2008 - Is it worth it really? sorry I can't comment back as I have to wait till this evening ... equity loans?
- yes g 4 it
- hey just go for it. Fill the forms of some cos. here & hav a great feed back ... http://www.freewebs.com/all-loan/index.html
borrowing money to invest is called, in a nutshell, arbitrage...that you can earn a higher rate of return on the money than it is costing you...this can happen with an inverted yield curve, i.e. that short-term rates are higher than long-term. A normally sloped yield curve has yields rising as you move out in time, consistent with the risk of repayment. ... ... But a mortgage is also a lower yield because it is secured, the collateral being the value of your home. To beat the yield (cost to you) on the mortgage you either have to take a longer life on your investment which is called gapping and is risky or you have to take on higher risk...higher yield....it's your home...as they say...don't bet the ranch.
That would really depend upon your ability to reinvest the equity in something that would yield a higher rate of interest than the money would be costing you. ... ... I often talk people in similar situations out of refinancing. Then again, I am not your run-of-the-mill loan officer just in it for the money. ... ... Assuming that you have good credit, a low debt-to-income ratio, and that you do not exceed 90% CLTV with your second or HELOC; the interest rate might fall somewhere around prime or prime plus 1%. ... ... Do you think that "depositing" that money at a 5% yield is a good idea? You would be losing 4% for the duration. Now if you could produce a 10% or greater yield (from your business or other solid investments), then ... and ONLY then ... might I advise you to strip some of the equity from your home. NEVER strip it all, as interest rates would be punishing and you have no buffer in the event that property values decline in your area. ... ... http://InspiredFinancing.net/
- I gave sparky the ba, cuz he and scott d are both rite. ... Hope all is well.
Knowledge Base: Loans
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