Wednesday, December 17, 2008

Should you fund major home repairs with a second mortgage?

My answer is no. First of all, why are you carrying out major repairs? Do you really need it? Or are you renovating to keep up with the Jones? Then you do not need to renovate your house.

Interest rates are very high, and everyday, we hear that people are made bankrupt. Many people plan their loans with the idea that they have a job. In today's fluctuating economy, no job is guaranteed. It is better to save some money for a rainy day. If not, only the banks, the real estate agents will be happy. It's "another another one bites the dust."

Another reason is asking if your major home repairs will add to your house value? If it doesn't, you might be better to invest your money elsewhere. On the same line, have a good look around of the houses in your neighborhood. If the houses are not much better than yours, your resale value will not be very high either. So if you spend a lot of money on repairs, you will not be getting much return.

Some people take a second or third job, their spouses go out to work to pay for the interest. At the end of the day, the stress is very high. The family relationship fails, and some even break up. Everyone, Father, Mother and the children suffer.

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