Why does everyone think you can just pull out all your equity without a plan?

My neighbor in Phoenix told me he did a cash out refi for $85k last month just to buy a boat, and now he's stressed about the new payment. I mean, I get wanting the cash, but you gotta have a real use for it, right? Has anyone else seen friends do this and then totally regret it?

3 comments

3 Comments

wendy_park7622d ago

My cousin in Tampa took out 60k for a pool. His payment jumped 400 bucks a month. Now he's working overtime just to cover it, and the pool heater broke in year two. That kind of stress isn't worth a few summer weekends.

angela_allen532d ago

Yeah, that's the hidden cost they never tell you about. The loan payment is just the start, then you're stuck fixing stuff forever. Makes you wonder how many people are one broken appliance away from real money trouble, right?

casey39322d ago

Oh man, your neighbor buying a boat with that cash out is a whole mood. I once used a bonus for a fancy grill I barely use, so I get the impulse!