, Columnist
Go Ahead, Homeowners, Tap Your House for Cash
People who can trade their home mortgage for a bigger one and pocket the difference don’t need to agonize about a 2007-redux.
Cash machines.
Photographer: Bing Guan/BloombergThis article is for subscribers only.
Cash-out refinancing, when borrowers trade an existing mortgage for a bigger one and then pocket the difference, reached the highest level last year since the 2008 financial crisis. With home prices appreciating during the coronavirus pandemic, it's actually surprising that it isn't happening even more often. It should.
Many homeowners worry too much about being overleveraged and kicked out of their homes, as millions were after the bursting of the 2007 housing bubble. Many borrowers say they’d prefer to get a personal loan at a higher rate than have one tied to their homes.