I am in my early 30's. My home is paid for and currently, even with the slumping real estate market, is still worth $500,000. I have no credit card debt, no car payments, however, my credit is a little 'beat-up'. I am self-employed and generate approximately $50,0000/year in profits from my business. Now what? How can i use the equity in my home to, perhaps, generate additional income? What would be the best move now? Any ideas and suggestions?
2007-03-14 08:25:40 · 7 answers · asked by rac 1 in Business & Finance ➔ Personal Finance
Just IMO
Great that the house is paid off.
Why would you want to borrow against that to generate income?
You have zero debt, keep it that way. You shouldn't care if your credit is "Beat Up" cause you got no debt and have no need to borrow money for any reason.
Max out the SEP IRA (or whatever you are doing for retirement). Continue to live W/O debt and retire early.
Eventually you may want to sell the house and move into a smaller less expensive place in another location, that is a matter of your personal preference. If you love where you live and love the house maybe you wont.
http://www.daveramsey.com/
Listen to the show or look over the content.
You are already doing better than 99% of the world, why muck it up?
2007-03-14 08:36:03 · answer #1 · answered by zaphodsclone 7 · 0⤊ 0⤋
You can get a equity loan, but why? You sound like you're in a great financial position. Your home can be a safety net, almost an insurance policy to cover you if things go bad.
If you've lived in the house for 2 of the last five years. You can sell the home and not have to pay the capital gains on it. Then buy a smaller place and invest the profits in the market.
2007-03-14 15:32:38 · answer #2 · answered by Fordman 7 · 1⤊ 0⤋
If you don't have any debt, then you are in a great place financially. BUT.......you never know what may be waiting for you right around the corner. If you are wanting to make the equity in your house work for you, I would suggest a home equity line of credit (aka HELOC). This is basically a line of credit that you can use at any time and you only pay on what you use. You don't have to use it unless you need it! Of course it is subject to the laws of you state.
2007-03-14 16:10:47 · answer #3 · answered by Texas Girl 3 · 0⤊ 0⤋
i agree with zaphodsclone.. no need to do anything.. despite your below par credit.. you don't need it anyway.. since everything you own is paid for anyway
don't get greedy.. a lot of people would love to be in your position.. your business is generating 50k a year.. so save most of it and enjoy doing the things you love to do w/ your spare time
maybe in a few years you can do some home-improvements with the money you have saved from your business.. so your home will be worth even more.. an extra bathroom.. pool.. or remodeled kitchen makes a huge difference
2007-03-14 17:31:44 · answer #4 · answered by do it movin' 1 · 0⤊ 0⤋
You may want to take some of the equity out to purchase rental property so that the house keeps working for you.
2007-03-14 15:29:52 · answer #5 · answered by Venita Peyton 6 · 0⤊ 0⤋
Buy like 30 women and start a game show called, "Who wants to f**k a millionaire?", sit back and enjoy!
2007-03-14 15:30:06 · answer #6 · answered by Anonymous 2 · 0⤊ 2⤋
Buy a VW splitscreen camper :)
2007-03-14 15:27:54 · answer #7 · answered by missy 2 · 0⤊ 1⤋