I personally don't think a first home should be considered "equity" at all: it's like considering the clothes you're wearing an asset. Sure, it is there for you to self if you're desperate, but we all know there is a stigma ssociated with "gambling away one's shirt/house/estate", and for good reason. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
The risk adverseness depends on what valuation you use ...
Well, you can get a 110%-equity, interest-only, variable-rate mortgage, and there are borrowers insane enough to accept those terms and lenders irresponsible enough to offer them. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
I know this theory is averse to the banking community, but consider this: who profits off your equity while you're paying the mortgage interest? Why shouldn't people profit off their own equity? While I recognize these loans have been much abused to leverage people into houses they can't afford, I was very close to an I/O loan before finding an incredible fixed-rate. The thing is, my house still only cost 2.5 X my salary. If you're using an I/O to get into a house that's 5 X your salary, then that's abuse. Initially, these I/O loans were intended as consumer-frinedly loans that came out after bank deregulation in the United States, and the banks absoltuely hated them.
I am not saying that you shouldn't use the loan to offset the value of your home, but that the potential value of your primary home should not really be used to offset your mortgage.
Or, rather, if I can barely meet my mortgage payments it's little consolation that my home gives me a positive net worth. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
