Home equity accumulates in four ways: the money committed in the original down-payment; any appreciation in the local housing market over time; physical improvements or renovations; and, of course, principal payments on the mortgage itself. Through these four avenues, cash value – or equity – steadily builds up in the property. While seemingly desirable on its face, this accumulation of wealth in the home has three detrimental consequences that are not generally well-understood by most consumers.

First, the cash in your home is “buried.” Not only is it unavailable in the event of a family emergency, but it is also vulnerable to lose due to periodic downturns in housing values, fire, or natural disasters such as hurricanes (insurance, where available, may not cover the full market value of your home). Perhaps more critically, cash trapped in property is earning zero interest, year after year. No prudent consumer would put money into a savings account or investment plan that yields no rate of return, but many homeowners do exactly that without a second thought when it comes to their mortgages. Keep Reading...

The explosion in the number and variety of mortgage instruments in recent decades – fixed- and adjustable-rate loans being the best known – now allows a knowledgeable lending agent to offer terms that are virtually custom-tailored to the needs of a specific borrower. While the basic 30-year fixed-rate mortgage remains the most popular type of loan, the growth in alternative instruments has given rise to a new class of professionals who can help you best manage your financial future.

Today’s mortgage consultant is far more than a bank agent or anonymous broker on the phone; he or she is an expert in the full spectrum of mortgages available. Most importantly, the mortgage consultant’s interest in your account extends well beyond the fee earned on a single loan transaction. Why? Because to properly manage the equity in your home, you will need a bi-annual mortgage “check-up” – an on-going series of regular reviews to determine whether and when to extract any accumulated equity in your home for the purpose of investing it in more lucrative, liquid, and secure funds managed by a reputable financial planner. Keep Reading...