I am one of those homeowners who is upside down on my house – I owe more than I believe it would sell for at this time. This is primarily because I have some big repairs to make, including a new roof, gutters, and painting the wood around windows and other trim. This work would put me in the position where we could possibly break-even on the home if we decided to sell, but then there’s the question of paying back the money it cost to make the repairs. We’ll be here for a long time, I expect!
However, if you do have some equity built up in your home, you could qualify for a home equity line of credit. These loans are making a comeback according to MSN Money,
Lenders are starting to make equity loans again, especially where home values are rising. Discover Financial Services, which also offers the Discover card, announced in March that it will offer fixed-rate home-equity loans of $25,000 to $100,000, initially to current customers and eventually to others.
But you won’t be able to borrow against every last cent of your equity. Lenders may be slow learners but they have noticed that their bubble-era practice of lending on 100% of a home’s value left them holding the bag when those homes suddenly were worth a lot less than the loans.
I applaud lenders for remaining cautious in not lending 100 percent of a home’s value, but also glad to see that people are again looking at home projects. This will definitely spur the economic recovery as home stores see an uptick in sales.