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Home Equity Increases Help Fuel San Diego Spending

By Joe Taylor Jr.
Local Lender Columnist
Mar 31, 2006
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Despite cooling housing prices in the rest of the country, San Diego's tight housing market allows homeowners to access their growing home equity.

Local officials expect home values in San Diego to increase, providing homeowners with increasing equity. Analysts predict that the value of houses in San Diego will increase between five and six percent in 2006. Although this is a modest rise compared to the jumps in home values in recent years, even a slight increase can unlock home equity for renovations or other large purchases.

Home Equity Increases Unlock Your Investment

Home equity loans provide homeowners with large sums of money for debt consolidation or major expenses. These loans usually come with low interest rates. In San Diego, a recent competitive interest rate on a home equity loan was 6.5%. These loans usually are approved at a fixed rate, and the homeowner receives a check and a repayment schedule.

Use Your Home Equity Wisely

Experts recommend pursuing a home equity loan if you spend it on something that will appreciate, such as improvements to your house, or something that would have great meaning to your life, such as adopting a child. Tapping your home equity for frivolous expenses like vacations or new cars can sting, especially if your home's value recedes.

Home equity loans carry several risks that homeowners should investigate before applying. For instance, you could lose your house if you can't make your payments. The outlook for the housing market in San Diego makes tapping into your home equity tempting. Before you apply for a home equity loan, experts advise that you speak with a spouse or a trusted friend about the necessity of your purchase and the chances that you might encounter difficulty with your payback schedule.

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About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.