What would you do with $200,000 home equity?


11 Years
Mar 29, 2008
Wenatchee, WA
We have been so broke for many months. I don't like not being able to care for my family because of lack of $$. My husband works full time at Lowe's, and I stay home and try to make money babysitting and selling eggs on ebay and anything else I can think of. Being poor is a lot of work! Anyway, the point: When we bought our house from my mom, we only bought it for about $115, 000 but comparable homes are selling for about $450,000 here. I keep trying to convince my DH that we should use our equity to invest in SOMETHING. A business or real estate or SOMETHING. I enjoy being self-employed, especially if I were actually making money. I keep thinking about buying SOMETHING wholesale to sell on ebay. So, I thought I'd ask the most knowledgeable people on the planet (hehe) and see what they would do? Whatcha think?
Don't TOUCH your equity! The two times I took out very modest amounts with very specific plans and I could not BELIEVE how fast it got ticked away. The only thing I would use equity for would be for an education in a career with a short school turnover time and a high paying, high demand job that you can actually stand to do at the end of a short tunnel, and only if I was good at school and following through on things.

Not trying to get all lecturey on you, just saying what things I would have done differently myself. Good luck with keeping your hands off your equity. Keep a rubber band on your wrist and every time you think of it, snap yourself REALLY HARD on your wrist. You will thank me in ten years if you follow my advice.
I have to agree. We bought a foreclosed home, and purchase price compared to the appraisal was nearly a $17,000 difference. Then after the appraisal found out we had MORE land then thought, added a huge deck, completely landscaped the front yard and did major repairs. I've gotten a quote for an additional $10,000. In this market I would not play games with a homes equity... You may need it someday to sell your home and start your life over again. Think retirement!

My BIGGEST suggestion to you, is if you want to hear more on what to do financially with your ideas go to www.SuzeOrman.com and read some of her suggestions. Shoot, send her an email and she can explain the ups and downs to you. She's a financial genius!!!
Either leave it in your home OR sell the house in order to pay cash for another property and move into it. That would basically be transferring equity from one house to another, and maybe becoming entirely debt free in the process. Those are the the only things I'd do with it. So much depends on your real estate market, too, so at the moment, probably the best thing is to leave it where it is. You'd have to leave the area of super expensive homes to find one for the cash you'd get from the sale.
if you are debt free then I agree with the rest, if you are not I say sell pay off debt and downsize into something more affordable so you can afford to take care of your family and put some money away for education etc.
Home equity should be used for 1 or 2 things IMHO

1. Home improvement that increases the value of the home and property beyond the expenses of the renos.

2. Unexpected emergency fund. ie...someone you love gets sick and you have major hospital bills to pay for.
Golly, the way the economy is these days, DO NOT borrow against your home! =:0 The only sensible use of the 'equity' (a concept largely invented by banks in order to get us to borrow against it so that they, the banks, can make money) at this point in time might be to sell the house and buy a cheaper one and pocket the difference to use for whatever seems necessary.

This is NOT a good time to be contracting more debt

Good luck,

I agree with the others. Home equity should not be used as a savings account that you dip into unless absolutely necessary.

If you couldn't repay the loan for ANY reason, you would lose your home. In this economy, it's safest to have the least amount of debt in case you or your husband were to lose a job.

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