Is it Time
to Cash Out of Your Home? 


   A recent article in the Money magazine covered the issue of cashing out of the properties in order to brat the possible housing bubble. Home prices nationwide are rising at a rate five times that of personal income and some areas gaining 20% to 30% a year.  Even with home pro\ices soaring, the number of properties purchased is on the rise.  Investment properties and condo-flipping have become the next rage among the get-rich-quick crowd.  This recent craze has led Money magazine to call homes the new tech stocks and we know how that boom turned out.

   Our current housing market has lead some homeowners to considering cashing out rather than risk losing their paper profits to a housing crash.  Should you jump on their bandwagon and unload your property? Here are some options from Money Magazine.

  
  • Cash out and wait - with this process, you sell your property and rent another while you wait for the market to crash in order to buy back in at a lower price.  The likelihood of this working out is pretty low as no one has successfully predicted the market, there is a possibility of rates increasing and rent is currently higher that mortgage payments in most areas.  Even investing the proceeds can backfire as other investments can tank sooner than the real estate market.  Plus, a real estate crash might not bring an end to high prices.


  • Downsize - with this process you sell your property and pour the profits into a smaller property with a more conventional mortgage.  You may have to settle for a less luxurious home or less desirable neighborhood but you will be better prepared to weather the storm if the market does crash.



    • Continued on Next page >>


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