A recent increase in home values has given South Floridians new hope – especially those who owed more than their properties are worth. Many are now using their equity to pay off home repairs, college costs and other large expenses.
This trend is also making lenders happy.
Bank of America’s interest in equity use jumped 50 percent across Florida in 2014, compared with 2013, the Sun Sentinel reported. PNC Bank’s home equity lending also increased, by 66 percent, in Broward County.
Kevin Maher, community outreach director for the Debthelper.com counseling agency in West Palm Beach, advised that homeowners take out equity lines only to finance home repairs if the improvements will enhance the value beyond the added debt.
Maher told the Sentinel that using home equity to pay off high-interest credit-card bills is a bad idea because most homeowners don’t change their spending habits and end up accumulating more credit-card debt. He also advised borrowers to be careful of interest-only lines in which they don’t pay down the principal amount. [Sun Sentinel] — Kristina Puga