 Recently I read an article in the Wall Street Journal titled: “Homeowners Are Again Pocketing Cash as They Refinance Properties” (subscription required). My first thought: Here we go again.
Unfortunately, the article was mostly positive on the development, as the writer’s take was that this reflects confidence in the economy and relative job security. I have no idea if this bodes well for the economy or not (although my intuition says it’s a negative), but on an individual level I think this is a really bad idea. There are no absolutes in personal finance, and everyone’s situation is different. With that caveat out of the way, lets look at why taking cash out of your home when you refinance can be a poor financial decision.  Recently my wife, Colleen, and I modified our mortgage. I’d like to share some of our thinking because it illustrates some of the trade-offs made in personal finance.
Dear Clients and Friends, I hope that the New Year finds you happy and healthy! I'm pleased to report that the McCann Family is doing great and we successfully navigated another Family Holiday Travel Juggernaut (FHTJTM is a registered trademark of the McCann Family). This time we enjoyed the warm sun and sand of Islamadora, FL (the sport fishing capital of the world). We are rested, relaxed and ready to tackle 2013! I hope you are too. Through the course of this year, I've had frequent conversations with clients and friends about our historically low interest rates and the affect on their financial plans. This leads me to my topic this quarter... |
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