james.vancini

Home Equity Extraction: The Real Cost of 'Free Cash'

I have been in home equity for 15 years, its amazing that folks think that when they remortgage houses to pay debt, that they never see the opportunity cost. But at the end of the day, most of it stems from people living beyond their means. Why else would we have a negative savings rate? People think nothing of having $30-40K in debt, using their home to pay it off, and doing it all over again 3 years later.
Part of it also stems from the cost of housing in some markets, but mostly it comes from the inability of consumers to say no.