Counting on your Home Equity? The Banks are Nervous
My wife and I were thinking that the economy may be sinking, but we have over 70% in equity. Our house is worth $630,000 if we sell it now and take a bath, but we only owe $170,000 on the mortgage. We were up for our mortgage renewal this month so we made an appointment with the bank to get the mortgage renewed and clean up some $20,000 in line of credit debt we have from fixing up our kitchen.
Well it’s been over 3 weeks now and no word coming yet. Our last mortgage renewals went by without a glitch or delay. It may be OK but it’s taking much longer to get this done. I’ll be calling our friendly banker tomorrow to see what gives.
This MSN money article mentions the fact that the banks are nervous, and it’s a fact. However, there are some states that are weathering the economic storm better than others. Texas has been doing alright amidst all of the recent layoffs and corporate bail-outs. You may have a job in a particular field that thrives in a bad economy like the movie business or perhaps the Internet business, but odds are you will be seeing this economy on your door-step some day soon.
My wife and I live in a fairly prosperous part of country due to the oil business, and we felt that our equity would be solid in the eyes of the bank(s) – considering that home prices in our area and city have not really dropped dramatically, there are only 3 houses for sale in our whole suburb, and we have recently upgraded our home. Unfortunately when the banks get nervous, they get really nervous. We’ll just wait and see.
I’ll post what happens with bank when the mortgage renewal is finished.
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