{"id":491981,"date":"2022-09-11T00:00:00","date_gmt":"2022-09-10T21:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/"},"modified":"2022-09-11T00:00:00","modified_gmt":"2022-09-10T21:00:00","slug":"nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/","title":{"rendered":"#NerdWallet: 3 reasons you should avoid borrowing against your home right now"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3584569b31e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3584569b31e\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/#%E2%80%9CNerdWallet_3_reasons_you_should_avoid_borrowing_against_your_home_right_now%E2%80%9D\" >&#8220;NerdWallet: 3 reasons you should avoid borrowing against your home right now&#8221;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/#Housing_prices_can_go_down_as_well_as_up_Heres_when_you_should_not_tap_home_equity\" >Housing prices can go down as well as up: Here\u2019s when you should not tap home equity<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/#You_may_need_your_equity_later\" >You may need your equity later<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/#Youre_deeply_in_debt\" >You\u2019re deeply in debt<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/#What_youre_buying_wont_outlive_the_debt\" >What you\u2019re buying won\u2019t outlive the debt<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/nerdwallet-3-reasons-you-should-avoid-borrowing-against-your-home-right-now\/#Liz_Weston\" >Liz Weston<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9CNerdWallet_3_reasons_you_should_avoid_borrowing_against_your_home_right_now%E2%80%9D\"><\/span>&#8220;NerdWallet: 3 reasons you should avoid borrowing against your home right now&#8221;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Housing_prices_can_go_down_as_well_as_up_Heres_when_you_should_not_tap_home_equity\"><\/span>\n  Housing prices can go down as well as up: Here\u2019s when you should not tap home equity<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap crawler\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0001163787\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0001163787\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       <em>This <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/3-reasons-not-to-tap-your-home-equity-right-now?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=1202050\" class=\"icon none\"><em>article<\/em><\/a><em> is reprinted by permission from <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\"><em>NerdWallet<\/em><\/a><em>.\u00a0<\/em><\/p>\n<p> Soaring real estate values mean many homeowners are awash in equity \u2014 the difference between what they owe and what their homes are worth. The average-priced home is up 42% since the start of the pandemic, and the average homeowner with a mortgage can now tap over $207,000 in equity, according to Black Knight Inc., a mortgage and real estate data analysis company.<\/p>\n<div class=\"paywall\">\n       Spending that wealth can be tempting. Proceeds from\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/mortgages\/home-equity-loan-line-credit-pros-cons?utm_campaign=ct_prod&amp;utm_content=1202050&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">home equity loans or lines of credit<\/a>\u00a0can fund home improvements, college tuition, debt consolidation, new cars, vacations \u2014 whatever the borrower wants.<\/p>\n<p>But just because something can be done, of course, doesn\u2019t mean it should be done. One risk of such borrowing should be pretty obvious: You\u2019re putting your home at risk. If you can\u2019t make the payments, the lender could foreclose and force you out of your house.<\/p>\n<p>Also, as we learned during the Great Recession of 2008-2009, housing prices can go down as well as up. Borrowers who t<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed their home equity were more likely to be \u201cunderwater\u201d \u2014 or owe more on their houses than they were worth \u2014 than those who didn\u2019t have home equity loans or lines of credit, according to a 2011 report by CoreLogic, a real estate data company.<\/p>\n<p>Other risks are less obvious but worth considering.<\/p>\n<p><strong>Also see:<\/strong> Yes, it could happen to you. Like the water crisis in Jackson, Miss., other U.S. cities are vulnerable to climate-change disaster<\/p>\n<h6><span class=\"ez-toc-section\" id=\"You_may_need_your_equity_later\"><\/span><strong>You may need your equity later<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Many Americans aren\u2019t\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/how-to-budget?utm_campaign=ct_prod&amp;utm_content=1202050&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">saving enough<\/a>\u00a0for retirement and may need to use their home equity to avoid a sharp drop in their standard of living. Some will do that by selling their homes and downsizing, freeing up money to invest or supplement other retirement income.<\/p>\n<p>Other retirees may turn to reverse mortgages. The most common type of reverse mortgage allows homeowners 62 and up to convert home equity into a lump of cash, a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of monthly payments or a line of credit they can use as needed. The borrower doesn\u2019t have to pay the loan back as long as they live in the home, but the balance must be repaid when the borrower dies, sells or moves out.<\/p>\n<p><strong>See<\/strong>: This new type of reverse mortgage would help retirees generate much more income<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p>Another potential use for home equity is to pay for a nursing home or other long-term care. A semi-private room in a nursing home cost a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>n $7,908 per month in 2021, according to Genworth, which provides long-term care insurance. Some people who don\u2019t have long-term care insurance instead plan to borrow against their home equity to pay those bills.<\/p>\n<p>Clearly, the more you owe on your home, the less equity you\u2019ll have for other uses. In fact, a big mortgage could preclude you from getting a reverse mortgage at all. To qualify, you either need to own your home outright or have a substantial amount of equity \u2014 at least 50% and perhaps more.<\/p>\n<p><strong>Read: <\/strong>My wife and I have $750,000 in savings and earn over $144,000 a year. Can we afford to spend $5,000 per month on housing?<\/p>\n<h6><span class=\"ez-toc-section\" id=\"Youre_deeply_in_debt\"><\/span><strong>You\u2019re deeply in debt<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Using your home equity to pay off much higher-rate\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/debt?utm_campaign=ct_prod&amp;utm_content=1202050&amp;utm_medium=wire&amp;utm_source=syndication&amp;utm_term=anne-stanleymarketwatch-com\" class=\"icon none\">debt<\/a>, such as credit cards, can seem like a smart move. After all, home equity loans and lines of credit tend to have much lower interest rates.<\/p>\n<p>If you end up filing for bankruptcy, though, your unsecured debts \u2014 such as credit cards, personal loans and medical bills \u2014 typically would be erased. Debt that\u2019s secured by your home, such as mortgage and home equity borrowing, typically isn\u2019t.<\/p>\n<p>Before you use home equity to consolidate other debts, consider talking to a nonprofit credit counseling agency and to a bankruptcy attorney about your options.<\/p>\n<p><strong>Read<\/strong>: Housing market \u2018weakening sharply\u2019 from April\u2019s peak, led by Seattle, San Francisco and San Diego<\/p>\n<h6><span class=\"ez-toc-section\" id=\"What_youre_buying_wont_outlive_the_debt\"><\/span><strong>What you\u2019re buying won\u2019t outlive the debt<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>It\u2019s rarely, if ever, a good idea to borrow money for pure consumption, such as vacations or electronics. Ideally, we should only borrow money for purchases that will\u00a0increase our wealth: a mortgage to buy a home that will appreciate, for example, or a student loan that results in higher lifetime earnings.<\/p>\n<p>If you\u2019re planning to borrow home equity to pay for something that won\u2019t increase in value, at least ensure that you aren\u2019t making payments long after its useful life is over. If you\u2019re using home equity to buy a vehicle, consider limiting the loan term to five years so that you\u2019re not facing big repair bills while still paying down the loan.<\/p>\n<p>Home equity loans typically have fixed interest rates and a fixed repayment term of anywhere from five to 30 years. The typical home equity line of credit, meanwhile, has variable rates and a 30-year term: a 10-year \u201cdraw\u201d period, where you can borrow money, followed by a 20-year payback period. You typically are required to pay only interest on your debt during the draw period, which means your payments could jump substantially at the 10-year mark when you start repaying the principal.<\/p>\n<p>This leads to a final piece of advice: With interest rates on the rise, consider using a home equity loan or line of credit only if you can repay the balance fairly quickly. If you need a few years to pay back what you borrow, getting a fixed interest rate with a home equity loan may be the better way to tap equity now.<\/p>\n<p><strong>More From NerdWallet<\/strong><\/p>\n<ul class=\"articleList\">\n<li>\n      <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/high-school-athletes-nil-deals?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=1202050\" class=\"icon none\">Clutch Money Tips for High School Athletes Becoming a Brand<\/a><\/p>\n<\/li>\n<li>\n      <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/smart-money-podcast-booking-a-dream-disney-vacation-for-cheap?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=1202050\" class=\"icon none\">Smart Money Podcast: Booking a Dream Disney Vacation for Cheap<\/a><\/p>\n<\/li>\n<li>\n      <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.nerdwallet.com\/article\/finance\/just-starting-out-learn-from-our-mistakes?utm_campaign=ct_prod&amp;utm_source=syndication&amp;utm_medium=wire&amp;utm_term=anne-stanleymarketwatch-com&amp;utm_content=1202050\" class=\"icon none\">Just Starting Out? Learn From Our Mistakes<\/a><\/p>\n<\/li>\n<\/ul>\n<p><em>Liz Weston, CFP\u00ae writes for NerdWallet. Email: lweston@nerdwallet.com. Twitter: @lizweston.<\/em><\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Liz Weston\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Liz_Weston\"><\/span>Liz Weston<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C06575-04D4-B545-711C-20B3B7FF7DB4%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;NerdWallet: 3 reasons you should avoid borrowing against your home right now&#8221; Housing prices can go down as well as up: Here\u2019s when you should not tap home equity This article is reprinted by permission from NerdWallet.\u00a0 Soaring real estate values mean many homeowners are awash in equity \u2014 the difference between what they owe&#8230;<\/p>\n","protected":false},"author":1,"featured_media":491982,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.mktw.net\/im-616064\/social","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-491981","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/491981","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=491981"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/491981\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/491982"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=491981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=491981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=491981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}