Equity or Foreclosure?

Do you own your house or does it own you?If the only information you have about the state of housing in Western countries is what you hear on the news, you probably don’t realize many people are paying off their homes faster than in years past, injecti9ng millions into their respective country’s economy.

Sure, three million homes went into foreclosure from 2007-2010, and another million are expected to in 2011 – and that’s just in the United States!

Regarding recent Bank of England data, we hear:

For more than two years now homeowners have been investing more in their properties than they have been taking out in new secured loans, injecting nearly £50bn into housing equity since the second quarter of 2008. We expect this consumer deleveraging to continue well into 2011 and beyond.

Benjamin Williamson, senior economist at the Centre for Economics and Business Research (CEBR)

A decade ago, 2001, “39.4 percent of nearly 83 million residential properties in 2001 had no mortgage.” The point is, 32 million residential properties in the United States were owned outright – free and clear. But we don’t hear about those homeowners.

Nor do we hear about the thousands of people enrolling in mortgage acceleration programs like Equity Cycling in order to pay off not only their homes but also all other debt in about a third of the time they would have been free and clear by following the lenders’ payment schedules.

Most of us still have a choice, don’t we? We can build equity faster, or blame someone or thing for our problems and walk away. Perhaps an over simplification, because some people who were living well within their means faced hardships that drove them over the edge financially. But most of the people we talk to simply spend way more money than they are aware of and they know not for what.

Which do you choose — equity or foreclosure?

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